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HomeMy WebLinkAbout2006.11.21_OPGA AgendaTYPE OF MEETING: Regular DATE: November 21, 2006 TIME: 6:30 p.m. PLACE: Council Chambers, Old Central Building 109 N. Birch Notice and agenda filed in the office of the City Clerk and posted at City Hall_at 6:00 p.m. on Friday, November 17, 2006. # _ id E t i Juliann M. Stevens, Administrative Assistant Lxmim 1. Call to Order Chairman Stephen Cataudella 2. Flag Salute 3. Boll Call 4. Consideration and appropriate action relating to a request for approval of the Consent Agenda. All matters listed under "Consent" are considered by the 'Trustees to be routine and will be enacted by one motion. Any Trustee may, however, remove an item from the Consent Agenda by request. A motion to adopt the Consent Agenda is non -debatable, A. Approval of the Minutes of November 7, 2006 Regular Meeting,. Attachment 14-4-A B. Approval of Claims. Attachment 44-13 C. AcImowledgement of receiving the monthly FY 2006-2007 budget status report. Attachment # 4-C S:\AgendasWGA\2006\] 121.doc OPGA November 21, 2006 Page 2 5. Consideration and appropriate action relating to a request for Trustee approval to modify the contract for services between the Owasso Public Golf Authority and IBC Golf, LLC. Ms. Bishop Attachment 45 Staff will recommend Trustee approval of a modification to the Golf Course Management Agreement between the Owasso Public Golf Authority and IBC Golf, LLC. 6. Deport from OPGA Manager. 7. Report from OPGA Attorney. 8. New Business. (New Business is any item of business which could not have been foreseen at the time of posting of the agenda.) 9. Adjournment. S\,agendasVOPGAA2006\I 121.doc OWASSO PUBLIC GOLF AUTHORITY MINUTES OF REGULAR MEETING Tuesday, November 7, 2006 The Owasso Public Golf Authority met in regular session on Tuesday, November 7, 2006 in the Council Chambers at Old Central per the Notice of Public Meeting and Agenda posted on the City Hall bulletin board at 5:00 p.m. on Friday, November 3, 2006. ITEM 1. CALL TO ORDER The meeting was called to order at 7:16 p.m. ITEM 2. FLAG SALUTE The flag salute was held during the City Council meeting preceding this meeting. ITEM 3. ROLL CALL PRESENT ABSENT Steve Cataudella, Chair Brent Colgan, Vice Chair D. J. Gall, Trustee Wayne Guevara, Trustee Susan Kimball, Trustee A quorum was declared present. STAFF Rodney J. Ray, Authority Manager Julie Lombardi, Authority Attorney ITEM 4. CONSIDERATION AND /-PPROPRL4TE ACTION RELATING TO A REQUEST FOR TRUSTEE S`I E E APPROVAL, OF KITE CONSENT AGENDA A. Approval of Minutes of the October 17, 2006 R egular )_-Veeting. B. Approval of Claims_ Ms. Kimball moved, seconded by Mr. Gall, to approve the OPGA Consent Agenda with claims totaling $25,267.146 and payroll claims for two pay periods totaling $49,332.38. YEA: Cataudella, Colgan, Gall, Guevara, Kimball NAY: None Motion carried 5-0. 0wasso .Public Golf Authority Novennber 7, 2006 None Done ITEM 7. NEW BUSINESS None ITEM 8. ADJOURNMENT Mr. Gall moved, seconded by Mr. Colgan, to adjourn. YEA: Cataudella, Colgan, Gall, Guevara, Kimball NAY: None Motion carried 5m0 and the meeting was adjourned at 7:17 pm. Pat Fry, Minute Clerk Steve Cataudella, Chairman N VENDOR DESCRIPTION AMOUNT TITLEIST MERCHANDISE 133.55 TITLEIST MERCHANDISE 247.62 CALLAWAY GOLF MERCHANDISE 276.37 CALLAWAY GOLF MERCHANDISE 454.87 FOREFRONT GROUP HATS 494.52 FOREFRONT GROUP HEAD COVERS 50.95 GOLF SHOP MERCHANDISE DEPT TOTAL 1,657.88 IMPERIAL COFFEE SERVICE COFFEE SERVICE 56.90 THE FADLER COMPANY GROCERIES 333.48 DELL MONITOR/SPEAKER 207.74 UNITED LINEN LINEN SERVICE 15.00 FOOD & BEVERAGE DEPT TOTAL H 613.12 ESTES CHEMICAL/FERTILIZER 965.53 ESTES CHEMICALS 54.60 YALE UNIFORM TOWELS 41.35 PSO 10/06 USE 1,443.64 LOWES PARTS 75.91 LUDER DROS PARTS 454.38 PRECISION SMALL ENGINE CO PARTS 49.60 AT&T PHONE USE 17A6 CARD CENTER JOB ADVERTISEMENT 300.00 GOLF COURSE MAINTENANCE DEPT TOTAL emm 3,402.97 SAV-ON PRINTING GIFT CERTIFICATES 226.82 OKLAHOMA NATURAL GAS 10/06 USE 381.57 OWASSO PUBLIC WORKS AUTHORITY WATER & SEWER USAGE 58.06 PSO 10/06 USE 1,728.51 ORKIN EXTERMINATING EXTERMINATING 48.08 UNITED LINEN LINEN SERVICE 112.57 COURSE TRENDS WEB HOSTING 345.00 GOLFSWITCH ONLINE T TIMES 99.00 AT&T PHONE USE 107.74 ADMINISTRATION DEPT TOTAL 3,1 77,35 OPGA FUND TOTAL �� 8,781.32 OWASSO PUBLIC GOLF AUTHORITY PAYROLL PAYMENT REPORT PAY PERIOD ENDING DATE 11/11/2006 OVERTIME DEPARTMENT EXPENSES Golf Shop Operations $0.00 Golf Course Operations 0.00 General• o $2,721.18 CITY DFOWASSO OWASSOPUBLIC GOLF AUTHORITY FISCAL YEAR 2O0U'2OO7 Statement ofRevenues &Expenses AnofOctober 31.2O00and 2O05 OPERATING REVENUES: Golf shop fees Merchandise sales COS-mmorohandise Food &beverage COS -food &b*verago Interest &other Transfer from General Fund TOTAL OPERATING REVENUES OPERATING EXPENSES: Personal services Materials &supplies Other services Capital outlay Debt service TOTAL OPERATING EXPENSES NET INCOME (LOSS) Month Year percent To -Date To -Date Budget of Budget Month Year Percent Budget ofBudgeL 68.802 322.770 849.000 38.02% 60.670 331.977 843� ��% 14.115 67.787 2OD�OO 33�Q% 13.331 06.039 10O'O00 4127% (1D29Q� � 0.501) (149.000) 33.OA�� (10�O5) �0.850) (123'2OO) 4127�� 1Q.572 91.603 234,580 39.08% 15281 99.580 275'0O0 3821�� (5�5Q) �B.71O) (73,515) 3&�5% (5.043) �2.8O3) �0'750) 362196 246 1.653 45.000 3�7% 245 1.255 48'O0U 281�& 33.833 133.333 400,000 33.33�& 33.333 133.333 4O0'00O 33.33% 40,445 222.136 882.105 33.55% 42.808 219.033 070270 3277�� 2.107 25.703 90.050 28.33�� 3.288 24.052 87'5OU 274Q�� 17.315 55.268 173.218 31.Q1�� 11.838 55.513 1OO'530 321� Y6 �'O� 27�18 41.1� 07.�% 52.12� ' � O� ��% 45 1��1 �O5� 24.�% 42141 1� �7'700 32,68% '--`~ 266/4 7,418 TO: HONORABLE CHAIR AND TRUSTEES OWASSO PUBLIC GOLF AUTHORITY DIRECTOR FROM- SHERRY BISHOP FINANCE MATE. November 17, 20(Uj Federal tax code places restrictions on the use of facilities funded by tax exempt debt. The construction of Bailey Ranch Golf Club was financed with tax exempt debt. In preparation for refunding of the GPWA 1996 Revenue Bonds (issued to finance the (yolf course), a Tax Questionnaire was completed to determine if any contract or use of the facility naught be in conflict with federal tax code. Tax Counsel. at Hawkins Delafield & Mood has recommended that the contract with IBC Golf, LLC (Ken Campbell) be amended. The original contract included wording; providing an "annual incentive fees' based on a percent of net revenues of the golf course. That wording has been deleted so that all contract payments to IBC Golf will be based on a fixed fee, Ken Campbell of IBC Golf LLC has agreed to these changes and has submitted the attached amended Golf Course Management Agreement, RECOMMENDATION: Staff recommends GPGA Trustee approval of the amended Golf Course Management Agreement between the OPGA and KC Golf TA C. ATTACHMENT - Golf Course Management Agreement GOLF COURSE MANAGEMENT AGREEMENT BETWEEN OWASSO PUBLIC GOLF AUTHORITY I= KC GOLF (BAILEY RANCH), LLC Dated Effective: q 2004 BAILEY RANCH GOLF COURSE MANAGEMEbLT AGREEMENT This GOLF COURSE MANAGEMENT AGREEMENT (the "Agreement°`) is entered into effective as of _ ___, 2664 ("Effective Date"), by and between the ®LASSO PUBLIC GOLF CGU S7 A0-T ORITY, a public trust ("Own ), whose address is _.. � and G GOLF (BAILEY RANCH), LLC, an Oklahoma limited liability co—mr aray („ KC Golf'), whose address is 2618 South Carson, Suite 1118, Tulsa, OK 74119, with respect to the following recitals: A. Owner holds beneficial title to land held in trust by The Larkin Bailey Foundation in the County of Tulsa, Oklahoma (the "Property"). The Property is currently being operated as an eighteen (18) hole public; golf course known as The Bailey Ranch Golf Course (the "Golf Course"), with certain related improvements such as a clubhouse complex (including, but not limited to, offices, a golf shop, men's and women's locker rooms, a restaurant, lounge, grill, kitchen and other facilities), (collectively, the "Clubhouse Complex"), golf course maintenance buildings, a golf cart storage facility, practice greens, a driving range, parking areas, rest -rooms, a smack bar, drinking fountains, water elements, cart paths and related landscaping (all such items referred to in this paragraph are defined collectively as, the "Improvements"). The Property and the lmprovements located or to be located thereon} are referred to herein collectively as the "Facility' B. Owner desires to engage the services of IBC Golf to act as manager of the Facility and provide professional golf management services. NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Owner and KC Golf agree as follows: Pfinifl ins `IA Defined._ ;Terms. When used in this Agreement, including any exhibits attached hereto, tl-ie following terms shall have the mewling ascribed to them in this Article 1, unless the context clearly indicates a contrary intent: "Affiliate" shall mean, with respect to any entity, (a) officers, directors or arnployees of, or general partner in, such entity, and (b) any i$,dividual, corporation, partner, partnership, trust or other entity which owns or controls, or is owned or controlled by, or is under common ownership or control with, such entity. As used herein the terra "control" shall mean the power to direct or cause the direction of the management and policies of an entity, whether through the ownership of partnership interests or voting securities, by contract, by appointment to a managerial position, or otherwise. "Base Fee" shall have the meaning ascribed for such term in Section 7.1 of this Agreement. " a itpf_. e ze gc i € ,s" shall mean all expenditi.ares whichareclGssifir.$d as capital expenditures in accordance, with gem,-arally accepted accounting principles, including ail srich expenditures associated with capital lease obligations. s<Cit?'=. shall mean the City of Owasso, Oklahorn a. 'Clubhouse L� shall h v t3n✓_6x€ng ascribed to tl64 term $o� e1tal , m bevG, .__--1---. ,El�rrl€ c�yg3 <a _cam <f cal shall rrrera$$ Ken Campbell andTim 1,., rraptot . €pie€� ._. lies" shall �� can ail e� u;�ae�er€t and supplies used oruseful in the operation and maintenance of the Facility, including, without limitation, the Pro whop Inventory, mowers and other turf care equipment, golf cars and all related maintenance equipment, chemical and janitorial equipment and supplies, office supplies, all furniture, furnishings, fixtures, equipment, and supplies used in accordance with this Agreement, including, without lirnitation, uniforms, cornputer equipment and communication equipment. " agility" shall have the meaning ascribed to that terra in Recital A, above. "Golf . €_gM" shall have the meaning ascribed to that term in Recital A, above. 'Goff_ a _ ayen€€aW shall mean the merchandise usually sold at golf shops at public golf course facilities, including without limitation, clubs, bags, balls, clothes, shoes, gioves, Data, and other golf apparel and accessories. "Gross Revgnu , " shall mean, for the period in question, all revenues received from the operation of the Facility or its various components, including without limitation, greens fees, cart fees, driving range revenue, club and shoo revenue, lesson fees, merchandise sales and frequent player card revenue. Interest income and revenues from sale or mortgage of all or any part of the Facility, revenues received on account of any casualty or condemnation or any other- revenues from any capital transaction shall be specifically excluded from the calculation of Gross Revenues. Gross Revenues shall be determined inaccordance with Generally Accepting Accounting Principles, except as the parties otherwise agree in writing. "I[Dprp t jts" shall have the meaning ascribed to that tears in Recital A, above. «I . ;tlr . �� ` shall mean any of the following employees of the Facility, Director of Golf, "General !Manager, Golf @Cuirse Superintendert and 11e ad Golf Professional. shall €e€ears any and all laws, statutes, ordinances, codes, orders, rules, regulations, permits, licenses, authorizations, entitlements, official orders and requirements of, or conditions Imposed by, all 't"ederal, state, county, municipal, and governmental regulatory agencies and a€,ithor=ities which are as of the data hereof or hereafter become applicable to the Facility or the operation thereof, including, kivithout limitation, any of the kmagoing relating in any way to h az a°doFB.,€`_i materials or ha.zar€»tears,>' waste. „Net Q_1:'ieraft�g_��tt �1a-ne" shall rn an, for the period in gsieasrion, tlac; Gross RevenuesMi€ us Operational Expenses (hereinafter „ t t") irk gL a€ 3 t shall have the €`i€ee�`s"'n&r� � :acr4t)a �i t 3 t �� t "E. rs`rn inSf ertSor �.� of t his Agreement. ement. Contracts" shall mean all contracts navy or heraafter entered into Fear th(eu man agerient, maintenance and operaatiorr of the Facility, including, without limitation, all capitW and opera ing lease cai"r r.rrie%ors, to be l_3i-o":v+cted 'for the Facility c£aa+.":l all such contracts -for G quips er,,t c`t,nd Supplies, h aH r`ar, .:srr afl r e,C > s, e (af fsxpenserz incurred by 'Litft (B' d€1 re ariE F(:r.[Ekt`8 ,u th the operation of the Property, excludirtg debt ser vk;e, intarest payments, depreciation of all golf ass.€€.ar°,e irnp €?verno€ors (incl€iding s"'€.,?t FlOt RryiiC,)d to greens, lees 2rriga€i€ n sysite m,. Cart paths, landscape, etc,), the ch.atsraousea tars€ldirig, inn a srferrar°€c 'facility, striving range and ;reA.ted irnprovernents, and all either" buildings, furniture and ePq€aipr€ eat, including all fixtures utilized in the operation thereof. Operational Expenses shall be determined consistent with generally Accepted Accounting Principles, except as the pasties otherwise agree in writing. Ol'a¢4rrarion al IE'Eypenses 39 include, but are not limited to, 1) the cost of equipment and supplies necessary to operate the Facility; 2) the management fees; 3) wages, salaries, and payroll related to employees at the Facility; 4) utility and energy crests, operating licenses and permits, and grounds and landscaping maintenance costs; 5) all expenditures for routine maintenance and repairs to keep the Facility in good condition and repair. "Qp&at€onal Fear" shall mean in year one (1), from the date of the Agreement to December 31, 2004, thereafter, January I to December 31 of each year. "Owner" shall have the meaning ascribed to that terra in the Preamble of this Agreement. "Owner' shall also refer to any successors or assigns of the Owner who acquire, title to Property and/or control of the Facilities. " wner°s_ �a-atabye shall mean Rodney ray, or such rather individual as designated by Owner in writing. "S3wrierS "aLde id" shall mean an operational and maintenance standard (including but not limited to the maintenance of the greens, teens, fairways, the Golf Course, generally and the Clubhouse Complex) of duality and excellence at least equal to the standards maintained as of date hereof at the following courses; Battle Creep in Broken Arrow and White Hawk in Bixby. Tav" small have the meaning ascribed to that terns in Recital A of this .Agrees ent. "Term" shall mean the period of t€rae commencing on the date written above and continuing until the date upon which this Agreement is terminated in accordance with the terms hereof. 1.2 s crauntigo -taoE€ €q. For purpose of this , greement, all accounting terms rot ott"seNvise defined herein in the recitals or in any exhibit, shall have the meaning ascribed to lhern in conformity with generally accepted accounting principles (" GA P`°) consistently :applied. RTiCLE ii Retention of KC Golf 2. Mitn€ rv_sr wolf ° iaraaiao,wrie€ herebyappointsand rateretains&KCraif, and lKC hareby accepts such appointment and retention to act as area independent agent and consultant to Owner as £a professional manager for the Facility during the € f,)rrn and € pon the terms and subject to the conditions hereinafter set forth. 2.2 Standards of rforri� rye � F�edat�o€��l�iitrv. &3et+�^ fit"�_. Owner .. and. d� ,. c�4f. Eft; Golf accepts the relationship of trust and confidence established betweon KC Golf and Owner by the terms of this Agreement. KC Golf shall consult with Owner and/car, Owner's representative concerning the management of the Facility to Owner Standards. id Golf covenants with Owner to furnish its best skill and judgment in performing its obligations herounder, and shall at all times provide such consulting and managerial services in a manner which maintains the good name and business reputation of Owner. KC Golf shall perform its deities and obligations under this Agreemerit in an efficient, expeditions, prudent and economical manner, consistent with the best interests of Owner, in accort'J anc e with the standards followed by its Golf in its i-rianago anent role of similar golf course facilities ril anaged by KC golf, and consistent with the standard of s> rnhar golf courses niana ged by other entities in the fie€spa, OMai ¢eama metropolitan area, uric in such manner so as to minimize all are€ioi. nts payable by Owner, as set forth in this Agr oernent arid otherwise in connection vtii"bti operation and rn aintenan e< of the Facility. KC Golf is entering into this Agreement as an independent contractor to provide the professional services set "forth in this Agreement. Kos Golf shall have a non-exclusive relationship with Owner with the understanding Owner shred receive the c€a€.ir°cesy of being notified prior to KC Golf 4. 0 contracting with any other golf course facilities within fifty (50) miles of Facility. ACC Calf acknowledges that it is acquiring no rights whatsoever in the Facility, or any portion thereof (including any trade names, trademarks, logos, emblems and similar identifying matters of either the Owner of the Facility) or the Equipment and Supplies, except a nonexclusive and revocable license, during the Term, to enter upon the Facility and use the Equipment and Supplies if, and to the extent reasonably necessary, to carry out its obligations pursuant to this Agreement. ARTICLE III Duties and Obligations of KC Golf In KC Golf's role as consultant and manager of the Facility, KC Golf shall provide the following professional sere/ices: .1 Busines_ L . C Golf shall prepare the "Business Flan" which shall include the following: (a) An introduction, which shall address the following areas: Facility Overview Facility Fact Sheet Club Brand Development a. Marketing Plan Strength, Weaknesses, Opportunities, Threat Analysis Competitive Market Analysis Marketing Methods Objectives, Strategies and Tactical Plan a Images and Graphics Checklist a. Operational flans Overview of Operations Golf Shop and Course Services Golf Course Maintenance ® Membership Food and Beverage General and Administrative a. Organization and Service Standards Facility Customer Service Philosophy Organizational Chart and Staffing Flan Job Descriptions for Key Personnel a. Capital Equipment and Operating Leases A, Annual KC Golf will develops are annual operating budget of expenses and revenues consistent with comparable facilities and consideration for guidelines established by Owner and historical Golf Coarse budgets. The Operating Budget will be available for review and approval by Owner no later then sixty (60) days prior to the first day of each Fisca� Year. The Operating Bridget shall contain: (a) profit and loss statement. (b f n-io rtl'Q), a written s€.€eS€€irary o business strategy and goals, (c) itemized list of capital expenditures, and (d) itemized list of operating and maintenance expenses including each employment position with corresponding salary and benefits. The Operating Budget shall be subject to approval by Owner and., if Owner does not approve the Operating Budget in writing, KC Golf shall revise the Operating Budget until the same is 59 acceptable to Owner. Any withholding of approval by Owner shall be based upon reasonable standards and considerations. Any reference- to the Operating Budget in any other section of this Agreement shall mean the Operating Budget as approved in writing by Owner.. B. Management. KC Golfs responsibilities shall include the following: (a) KC Golf shall, subject to any restrictions or limitations set forth elsewhere in this Agreement, perform or cause to be performed certain tasks which may be necessary or appropriate in connection with the ongoing operation, management, promotion, maintenance, repair and upkeep of the Facility. In performing such tasks KC Golf shall oversee and Implement the day -to -dray management of the Facility, as follows: W Develop and implement a comprehensive marketing plan for the Facility, outlining all facets of the plan and develop a budget for implementation of the plan, for review and approval by Owner (ii) Supervise all sales, marketing, advertising, promotion and publicity developed by or on behalf of Owner relating to the Facility. Bach promotion shall include providing complimentary golf privileges to those individuals deemed appropriate by KC Golf in connection with the marketing and promotion of the Facility. (iii) Maintain all Operating Contracts (other than such Operating Contracts as may be replaced by a new Operating Contract) necessary or appropriate for the ongoing management, maintenance and operation of the Facility in accordance with this Agreement. (iv) Consult with Owner and Key Employees regarding the hiring, supervision, arid training of earnployees and staff needed for the operation of the Facility. (v) Con writ with Owraf r and Key Employees regarding salary and bonus programs of gall employees in accordance with the Operating Budget, Implement the comprehensive rear€gat€ng plan developed by IBC° Golf for the Course. (vi) Consult with Owner and trey Ernpioyees regarding annpiyoo Job descriptions, .and operational and procedural manuals, (Vii) Subject to prior written approval of Owner, establish fee snc`6°ieduie s for they Golf Cmirse and related services, (viii) Supervise the nianage went of p€aye on the Golf Course and the operation of the golf shop, restaurant, driving range and golf carts, (ix) Supepvise the physical rnainten ante of the Golf Course in Owner Standard condition. W ..`u; ,- nit, ter review and appro`idai by Owner proposal 4e;6trF,ests for t u>pita expenditures to expand or improve the F acl ity: (A) With the prior written approval of Owner, supervises (Apit al Exp on itrEies of the Facility incii¢di€ g, they purchase of the Golf a.. otirso m a€ntenarwe ogi,flpm ntgale` cads, Cioif Course and ClUbl;ou se CFeaini kam improvements, and pass on to Owner r cal€ Cost savings, re�sr,§el6rlg krorn any m..itk4)nal x«€,.zy€ng power of KC Golf, (Ai) Subject to the Operating 9^t,9dget„ approve), when due, all costs and expenses 0 of associated with the management, maintenance and operation of the Facility, as provided for herein, for submittal to Owner for Payment. (Av) Coordinate ail onsite administrating duties necessary for the processing and payment of payroll and benefits. (b) Subject to the prior approval of and ongoing consultation with Owner, plan and promote special functions intended to generate Gross Revenues for the Facility, develop strong awareness for the Facility, and coordinate marketing activities and communicate with news media, business firms, golf courses, civic organizations and other entities to promote an increased interest in golf at the Facility, all in a manner which promotes a positive image of the Facility. a. Implement the Operating Budget. A. QMcatjLig ',atitra . KC Golf shall, subject to the Operating Budget and all laws and purchasing policies governing the City of Owasso, secure all Operating Contracts necessary or appropriate for the maintenance, managernent and operation of the Facility during the Term in accordance with this Agreement, All such Operating Contracts shall be executed by the Owner. Operating Contract procedures shall be determined and provided by the Owner. M &qqWis Lion — Q qvpff-lnLajyKC Golf may recommend to Owner brands and styles of, and suppliers for, all Equipment and Supplies, and shall, at Owners expense and in accordance with the Operating Budget and all laws and purchasing policies of the City, purchase or lease, or cause to be purchased or leased through other persons or firms, and supervise and coordinate the delivery and installation of all such Equipment and Supplies,, In addition to the foregoing, KC Golf shall, at Owner's expense and in accordance with the Operating Budget as well as all laws and purchasing policies of the City of Owasso, purchase, repair, maintain, and keep the Facility adequately furnished with all necessary Equipment and Supplies. The cost of all such Equipment and Supplies, shall be charged to Owner at not cost, and Owner shall be credited with all refunds, allowances and other discounts allowed to the purchaser,. M MPULfIly- WHIn L. Review. KC Golf will provide the Owner with a Monthly OperationaRe l view ('M.O.R") including an update and assessment of the marketing and sales activities. The M.O.R, will be delivered by e-mail each rnonffi pursuant to the, notice provisions set forth herein. 33 Ou Mly an a A-UG M U 1g, � KC Golf will meet with a designated ropresa.,,,ntative of Owner at -- Qn , C least quarterly for a formal review of the operations at the., Facility- -g 3.8 Effl.&Qygpgj. KC Golf will consult with Owner and Key Employees concerning matters relating to the hiring, supervision, training and retention of employees of the Facility. Notwithstanding the, foregoing, Owner and/or Owner's Representative shall at all times retain final authority regarding ornployee related decisions, including but not limited to: hiring, srip�arvising, training, retention, an.d compensation. 3.9 KC Go gif , j(;Lt1jrjg.. R is agreed by the parties themlf has no alm"10rity under ',g it( 2YL-'g_&j c this Agreernent to make decisions related to employee matters governed by the City-s Personnel Manuafl ("Manual") and other applicable Legal Req€..iirernents, and shall have no responsibility to make decisions regarding the same- All Rm'.1lity employee issues, problems, misconduct, and aAatfad matters are subJect to the Manual and the Legal Requirements, and as such, R is agreed by the parties U-tat frorn time to fifne as such matters arise, the same shall be roporited and/or unilaterally directed to the Direcctor of Golf by En­q)loyKC ens of Golf anft dennployeas of tho Facility, 79 ARTICLE IV Restricted Activities of KC Golf 4 t Restricted Activities of KC Golf. Without the prior written consent of Owner, which consent may be granted or withhold in Owner's sole discretion, KC Golf shall not do any of the following during the Term: a. Borrow or lend money in the name of Owner. (b) Assign, transfer, pledge, compromise or release any of the claims of or debts due Owner, except upon payment in full, or, arbitrate or consent to the arbitration or settlement of any claim of or against Owner or any other dispute or controversy involving Owner. (c) Liaise, execute or deliver in the name of Owner, or with respect to any of the assets of Owner or the Club, any assignment for the benefit of creditors or any bond, confession of judgment, chattel mortgage, security instrument, deed, guarantee, indemnity bond or surety bond. (d) Lease, sell, transfer, assign, convoy, pledge:, encumber, mortgage, hypothecate or otherwise dispose of the Property or the Improvements, or, except as contemplated in the applicable Operating Budget, lease, sell, transfer, assign, convey, pledge, encumber, mortgage, hypothecate or otherwise dispose of any Equipment and Supplies. (e) In the name of or on behalf of Owner, endorse any note, or become a surety, guarantor, or accommodation party to any obligation. (f) Commence or maintain in the name of or on behalf of Owner any action or proceeding, whether judicial, administrative or otherwise. ARTICLE V Duties and Obligations of Owner A. �B�eaolss an-d—lac cotds. (a) Owner will supervise and direct the preparation and maintenance of full and adequate books of account for the Facility in accordance with GAAP consistently applied and such ott€er records reflecting operational results of the Facility. (b) On or about the twentieth (201h) clay of e:acla calendar month Owner vvill deliver, or cause to be delivered, to KC Golf the following information relating to the Fadi€ty and the operation of the Facility. @ A balance sheet as of the last day of the preceding calendar month, (ii) A profit and lass statement for the preceding calendar month and Operational Year to data. (iii) A cash flow statement fcm the preceding caiondar month and Operational Year to date. (iv) An analysis of the variances from the Operating Budget for they preceding cFason:,aia$` mt t.ii and Operational Yeer'.€" to Glatau vvEtl'E the ass4stci$$4,9e of €P8e Key Employees, (c) Within sixty 160) days after the and of each Operational Year, Owner will deliver, or cause to be delivered to KC Golf the following financial information relating to the Facility and the operation of the Facility, 80 A balance sheet as of year-end. (ii) A related statement of profit and loss, including all supporting departmental schedules of revenue and expense and an; attached computation of KC Golf's compensation for such Operation Year. (m) A year-end cash flow statement. (iv) An analysis of the variances from the Operating Budget for the Operational Year with the assistance of the General Manager and Facility department heads. (d) All annual financial statements of the Facility will be audited or reviewed according to GN1\P consistently applied by independent public accountants identified and approved by Owner. The cost of such review or audit (if audited financial statements are requested by Owner) shall be reflected in the Operating Budget. M Owner shall allow KC Golf, its accountants, attorneys and agents the right to examine and make copies of books and records of the Facility, provided such examination is conducted with as little disruption to the business of the Facility as possible. If, as a result of any such examination, it is discovered that Owner has misstated the financial results of the Facility, Owner shall promptly pay to KC Golf any sure shown to be payable by Owner to KC Golf as a result of any such examination. If it is discovered that Owner has misstated the financial results of the Facility by more than two percent (2%) in any fiscal year, Owner shall immediately pay to KC Golf all costs of such reexamination and such cost shall not be considered Operational Expenses. ARTICLE VI Term 6A Lz,piraties n elf _rg rn; _- e on. This Ag ffq i 6 a 0 _L_,__jEXt,!nsi reenient shall commence on the E, , etiv D t and shall t(Mrninate on December 31, 2006. This Agreement shall automatically extend for one successive term of two (2) years unless either party provides the other party written notice of its intent to terminate not less than one hundred twenty (120) days prior to the expiration of the then current term. A. Te inatio .b Ow er 9 � ,_j)fQertain Evds er, j1pop-_the, :�gQ u_[ ceT.g (a) Owner may terminate this Agreement in the following circumstances: (i) KC Golf has amgaged in willful and material misconduct; (H) KC Golf has failed to perform any of the terms or conditions of this Agreement to be performed by KC Golf within fifteer; (15) days after written notice from Owner (or such additional time as is reasonably required to correct any such default); (Hi) repeated misconduct on the part of KC Golf which impacts adversely the reputation of the Facility-, or (iv) the occurreirice and continuation of an Event of Default by KC Golf, 6,3 'T'erv-ninatioti-L)Y-.K.C.-.G.oif. (a) KC Golf in ay terminate this Agreement irl the fOHOWing &CUMSUMCOS: (0 Owner has il f(1) 0itm,teengago I in vvMul anrnterial rnisconMUGt; 1%inerflas aany pefyf therms or conditions of this Agreennent to be performed by Owner within fifteen 1,15) days after written notice from Owner 'or such additional time as is reasonably required to correct any such default); (iii) repeated conduct on the part of Owner which innpacts KC Golf's ability to perform its obligations Linder this Agreement; or (v) the occurrence and continumfion of an Event of Default by Owner. 99 ARTICLE Vill Compensation 7.1 Base �_ Fee. KC Golf shall be compensated for its services as the professional manager of the Facility as follows: For each calendar month, KC Golf shall be paid a monthly fee calculated at V12 of the annual base fee of forty thousand ($40,000) dollars. Payment shall be paid within five (5) days after the last day of the month. 7,2 reviews, Reviews shall be conducted once every six (6) months by Owner for purposes of its consideration of increasing the Base Fee based upon improvements to the service, quality and financial performance of the Facility. KC Golf shall submit a review request summarizing the results for the period under review. 7.3 Additional _5engfiL KC Golf is responsible for any and all travel expenses to and from the Facility; however, KC Golf Employees shall receive the sat -no privileges as employees of the Facility in regard to golf, food and beverage purchases, and any other related privileges. ARTICLE V11H Insurance 8A .1mimnoe Ao. be. Maintained by Owner. Owner shall keep in full 'force and effect during the Term the following specified insurance: (a) Comprehensive or commercial general liability insurance written on an "occurrence" basis against claims for personal injury (including bodily injury and death) and property damage, with a reasonably acceptable deductible, with a combined single limit for bodily injury and property damage of at least One Million Dollars ($1,000,000) per occurrence and Two Million Dollars ($2,000,000) in the aggregate. (b) Property insurance in an arnount riot less than the full replacement cost of all improvements, contents, invc.,intory and other insurable property. (c) Workers compensation insurance for Owner's employees and Faciflty ernployees as recquired by applicable law. (d) Sucl"i fidelity insurance wiff i respect to Owner's arnployees and Facility ernployee.s, as Owner elects. H Insurance covering leased and owned, as applicable, equipment for use on the Property. (f) Umbrella or excess liability coverage insurance in the arriount of $5,000,000, As of the Effective Date and thrOLAU)hout the Tc,,rrn, KC Golf shall at ail firnes be included as ,an additional named insured with respect to the coverage specified above. Within fifteen ('15) calendar days of Owner's receipt of any written request by KC Golf, which request may be made (a) at any firne dk,,�,ring the first thirty (30) days of theTerni and (b) dwmiaftor at any time throughout ffie Term, Ovqrt(,,)r shall provide to KC Golf written evidence of the types and amounts of insurance then matntained by Owner purst.ian' to this Se-ction 8A and verifying that KC Golf is an additional insured. Such, written evidence may be in, the form of a summary prepared by Owner or, if requested by KC golf, certificates Of 41SUrance. 8 2 insurance ly a t t in d jKqj, dition to the inSUrance mainti aned by 0,wrier In ad 100 for KC Golf set forth above, KC Golf may obtain and beep in full force and effect during the Term such insurance coverage, limits, and deductibles as determined by KC Golf in its sole discretion. 9.1 Indemnification _by-Qvwner. Except to the extent covered by collectible insurance, to the fullest extent permitted by law, Owner shall indemnify and hold KC Golf harmless from ail liability, loss, damage, cost, or expense ("Losses") (including, without limitation, reasonable attorneys' fees and expenses, whether incurred at the trial, pretrial, or appellate level) arising from or relating to Owner's willful or criminal misconduct, gross negligence, fraud or breach of this Agreement. KC Golf will notify Owner of any claim, action, suit, or proceeding subject to this indemnification provision, and Owner shall, upon KC Golf's request and at Owner's expense, defend such claim, action, suit or proceeding, or cause the same to be defended. All references in this Section 9 to KC Golf shall mean and include its respective members, managers, shareholders, officers, directors, employees and agents. 9.2 Indemnification by K Golf. Except to the extent covered by collectible insurance, to the fullest extent permitted by law, KC Golf shall indemnify and field Owner harmless from all liability, loss, damage, cost, or expense ("Losses") (including, without limitation, reasonable attorneys' fees and expenses, whether incurred at the trial, pretrial or appellate level) arising from or relating to KC Golfs willful or criminal misconduct, gross negligence, fraud, or breach of this Agreement. Owner will notify KC Golf of any claim, action, suit, or proceeding brought against Owner subject to this indemnification provision, and KC Genf shall, upon Owner's request and at KC Golf's expense, defend such claim, action, suit or proceeding, or cause the same to be defended. 9.3-Limi�atioii2 of Liability_. Notwithstanding any other provision of this Agreement, to the fullest extent permitted by law, Owner shall use its best efforts to insure that KC Golf is afforded all statutory immunities and safeguards available to employees of the State and its political subdivisions under the Governmental Tort Claims Act, 51 03� §§ 151, et at. Further, Owner shall indernniiy and hold KC Golf harmless from all claims, costs, demands, debts, duties, liabilities, judgments, and arnounts, and expenses (including attorney fees and costs) actually incurred by KC Golf in connection with the investigation, defense, negotiation and settlement of any such claim or any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative to which KC Golf is or becomes a party, and from all liability, loss, damage, cost, or expense, by reason of KC Golf acting as manager of the Facility and within the scope of this Agreement. No indemnity pursuant to this section 9.2 shall be made by Owner: (i) for amounts paid by collectible insurance, or (ii) on account of KC Golf's conduct which is finally determined to have been knowingly fraudulent, dishonest or willfully in violation of applicable law. 9A 'Su€rvival. The indemnification obligations of this Article IX shall survive the termination of this Agreement. AIRT11 LE Default 10.1 Events of Default. The occurrence of any one or more of the following events which if not cured in the time permitted hereunder shall constitute a default under this Agreement ("Event of Default"). 10,2 F aailuri,to F'_ay Surfis_Oue.. Either paar€y's3 failure to pay any sums payaWe and ar this Agreement when due and such failure shall continues for a period of fifteen (15) days alter written notice, to the, defaulting parry specifying the item not paid, 11 9 1 d.3 E-a ilur.. L(_ L'oMjy. Either party's failure to comply with ray of the covenants, agreements, terms, or conditions of this Agreement and such failure shall continue for a period of fifteen (1 s) days after written notice; to the defaulting party specifying in detail the nature of such failure, Notwithstanding the foregoing, in the event any failure cannot with due diligence be cured within such fifteen (1 ) day period, if the defaulting party proceeds promptly and diligently to cure the same; and thereafter diligently prosecutes the curing of such failure, the tirne within which the failure may be cured shall be extended for such period as may be reasonably necessary for the defaulting party to cure the failure. ARTICLE XI Representations and Warranties 11 A K _Golf 3 qp giitaLiQ s. As a material inducement to Owner to enter into this Agreement, KC Golf represents and warrants the following: (a) KC Golf is a limited liability company duly organized, validly existing and in good standing under the lave of the State of Oklahoma; that it has all necessary power and authority to enter into this Agreement and to carry out the transactions contemplated herein; and that the € xecution and delivery hereof and the performance by KC Golf of KC Golfs obligations hereunder will not violate or constitute a default under the terms and provisions of any agreement, law or court order to which KC Golf is a party or by which KC Golf is bound. (b) All actions required to be taken by or on behalf of KC Golf to authorize it to execute, deliver and perform its obligations under this agreement have been taken, and that this Agreement is a valid and binding obligation of KC Golf enforceable in accordance with its terms, except as the same may be affected by bankruptcy, insolvency, moratorium or sire lar haws, or by legal or equitable principles relating to or limiting the rights of contracting parties generally. (c) The person(s) executing this Agreement on behalf of KC Golf have full power and authority to bind KC Golf to the terms hereof. 11,2 QANnprs, flap r getjtL t �ar� A. s «;a material inducement to KC Golf to enter Into this .._ ___ Agreerne nt, Owner represents and warrants thme following: (a) Owner has all necessary power and authority to enter into this gre.erilent arid to carry out the -transactions cc)nternplated herein; and that the execution and delivery hereof and the., performance by owner of Owner's r s obligations hereunder will not violate or constitute a default Linder the terms and provisions of any agreement, law or court order to which Owner is a ,arty or by which Owner is bound. (b) All actions required to be taken by or on behalf of Owner to authorize it to execrate, deliver and perform its obligations gander this Agreement have been taken and that. this Agreement is a valid and binding obligation of Owner enforceable in accordance with its terse, except as the same may be affocted by bankruptcy, insolvency, moratorium or sirnhlar laws, or by le~ V l or equitable principles relating to or limiting the rights of contracting parties generally. (c) The p r. ones e:Xoe riling this Agrec;me nt on behalf of Owner havo till power and authmority to blind Owrior to the terms hereof, ARTICLE X111 Transfers zransf r>s and As -signor wntsh '12.1 [L. rnitatios3_owr..K(,, Golf. KC Golf slmaH not s-A, t,-,on (,,, , assign trar€s€er, ssypothacaite,, phoca€tea, or otherwise dispose ea of (0mlragpreo to Ito any of the foregoing) all or any part caf its interest, of any, in this Afire-em `srd, or any contracbml rights or obligations rialated hereto (including any rights to 12 receive payments), without the prior written consent of Owner, which consent may not be unreasonably withheld. Provided, however, SAC Golf €a'aay assign this Contract to are entity that is similarly engaged in the golf management business and that employs the principal members of the current IBC Golf management teams 12.2 LirY1Htatioq_QULOWner. Owner shall riot assign, dispose of or transfer any interest in the Property or the facility unless the purchaser thereof assumes at the time of transfer, in writing, Owner's obligations under this Agreement. ARTICLE X1111 Miscellaneous 13.1 4Vgsver. The waiver by either Owner or KC golf of any breach of any terra, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition herein contained, No covenant, tears or condition of this Agreement gall be deemed to have been waived by Owner or KC golf, unless such waiver is in writing signed by the party against thorn such waiver is asserted. 13.2 Entire r@erraent. This Agreernent sets forth all the covenants, promises, agreements, conditions and understandings between Owner and KC Golf, oral or written, relating to the subject matter of this Agreement. No subsequent alternations, amendment change or addition to this Agreement shall be binding upon Owner and KC Golf unless reduced to a writing and signed by both parties. 113 �Q�. Notices, statements Lind other communications to be given under the terms of this Agreement shall be delivered in a tirnely fashion (and in any event within any tirrre limits established elsewhere in this Agreement) and shall be in writing and delivered by hared (Including pre- paid courier) or so nt by certified or registered mail. Postage prepaid, return receipt requested, as follows: if to Owner: Owasso Public (golf Authority 111 North Main Owasso, OK 74055 tin: FIodney Ray Email: I;f to KC Golf', KC Golf (bailey Ranch), LL. 1638 mouth Carson, Suite 1118 Tulsa, OK 74119 Attic: Ken Campbell Email: keri@greenwaygolf.net or at such other address as 14'om time to time designated by the party receiving the reoi.s(:e in .accordance with this Section 13.3, The date of service of such notice.. shall be the date s uic,.li notices are, dailvered to the party to whor➢E the notice is given, 1 <:°sA t=:oa Otni§'er covenants ants to use its best offorts to 'fun.-W all nc.-'cc'ss a€ y capitaexp(anditur;ems for the, Golf Coursa.: and Facitity on an. ongoing basis. 13h1tce;_s`rest_ interest shWi s:aa €,nine OVI ., f StAn,6 €wed by either party reiei6to t3f ,at'aor party starting from the first date of delinquency and continuing until the Mill arnwjnt, iricluding each interest is paid. Such interest shall accrue- at a rate equal to the, lesser of (a) the rnoximurn rate of interest Hallowed by applicable law, or (b) the rate of interest announced by Bank of nnerica National Trust and Savings Association or, its F$,€i ca) ss ors, as of such date of delinquency, as its "prime" or 3 9 "reference" rate, plus two percent (2% 13.E &st c�essors and Assignij. All of the rights, benefits, duties, liabilities and obligations of the parties hereto shall inure to the benefit of and be binding upon their respective successors and assigns, including but not limited to any subsequent owner of the Property and/or Facility. 13.7 persons lndemnified. All agreements by either KC Golf or Owner to indemnify or hold the other harmless contained in this Agreement shall inure to the benefit not only of the respective indemnitee but also to that of its and their subsidiaries and Affiliates, and shall also inure to the benefit of the members, managers, directors, officers, employees and agents of any of the foregoing. 13,3 DisclaimEr, Notwithstanding any other provision of this Agreement, IBC Golf makes no representations regarding the Legal requirements as they may apply to the City, the Facility, the Facility employees, or the purchasing policies of the City, nor KC Golf's knowledge of the same. IBC Golf agrees to use its best efforts to satisfy any Legal Requirements that apply to the Facility upon consultation, recommendation, and direction by the Owner or Owner Representative. 13.9 Applicable Law. This Agreement and all provisions thereof, irrespective of the place of execution or performance, shall be construed and enforced in accordance with the laws of the State of Oklahoma. 13,10 Cumulative Ric hts, The rights and remedies conferred upon both Owner and KC Golf in this Agreement and by law are cumulative. 13,11 a Litjg Clause. if any provisions of this Agreement, the deletion of which would not adversely affect the receipt of any material benefit by any party hereunder or substantially increase the burden on any party hereto, shall be held to be invalid or unenforceable to any extent the same shall not affect in any respect whatsoever the validity or enforceability of the remainder of this Agreement. 13.12 Attorrteyi fees. If any party fails to perform any of its obligations under this Agreement or if any dispute arises between the parties concerning the meaning or interpretation of any provision of this Agreement, or enforcement thereof, then the defaulting party or the party not prevailing in such dispute, as the case may be, shall pay any and all costs and expenses incurred by any other party on account of such default and/or in enforcing or establishing its rights hereunder, including, without limitation, court casts and reasonably attorneys' fees and disbursements. Any such attorneys' fees and other expenses incurred by any party in enforcing a judgment in its favor under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such attorney's fee obligation is intended to be severable from the other provisions of this Agreement and to survive and not be merged into any such judgment. 13.13 F r"ther ism Assurances. KC Golf and Owner each agree to execute and deliver from time to tirne, promptly following any reasonable, request therefore by the other party, any and all instruments, agreements and docuanents, and promptly shall take such other actions as may be necessary or appropriate in the reasonable determination of the other party, to care out the transaction described in this Agreement, 3,14. € o. I,hJrd-Pa,!1 _._ Beneficiaries. This Agreenne.nt is not intended and shall not be deemed or construed to convey any rights, powers or privileges on any person, rirrrn, partnership, corporation or other entity not a panty hereto except as rraay be expressly provided herein to the contrary. 13A5 t"it,ne, Time is of the essence of this Agreement and each provision hereof of which time; is an elerraent. fSigna `ure page tbIl ws.] 140 [Signature page to Agreem.entl IN IT WHEREOF, Owner and KC Golf have executed this Agreement s of the date first above written. OWASSO PUBLIC GOLF COURSE AUTHORITY, a pUblic trust y: Name: € odney Ray Title; "V% GOLF" KC GOO (BAILEYRANCH), tvLC an Oklahoma flni'si-ed liability cam,,,.iny By. KC GOLF, W LC are Oklahoma, lira€t -- labi lty companyits rna d 4 By:�� J _Ken Campb 159