Board of Park Commissioners

Board of Park Commissioners Special Meeting Minutes Friday, October 19, 2018 2:00- 3:30 P.M. C I T Y o OP 455 N Main llllCHITA City Hall 1 st Floor Board Room Wichita, Kansas 67202 Members Present: Troy Palmer, Hoyt Hillman, Alejo Cabral, Ty Tabing, Tori Deatherage, Eddie Fahnestock Members Absent: Bill Ramsey City Staff: Troy Houtman (Director, Park & Recreation), Penny Garding (Clerk), Elizabeth Harlenske (Assistant City Attorney), Troy Hendricks (Park Staff), Scot Rigby (Economic Development), Mark Manning (Finance) Golf Advisory Committee: Dr. Williams, Tom West, Cindy Renard, Debbie Burch, Richard Schodorf Guest: Item Descri�tion Call to Order Troy Palmer, President, called the meeting to order at approximately 2:01 p.m. Announcements There were no Announcements. 1 MacDonald Golf Course Sale RFP Houtman thanked everyone for reconvening. Mr. Palmer had requested another meeting so more information could be passed on. Commissioner Deatherage requested additional information which was provided. The latest draft of the Request for Proposal, with changes and corrections, was provided as well. Mr. Hillman emailed regarding the cell tower. We might need to tweak that a bit. Houtman stated he wants to make sure we understand why we are here. This goes back to the situation with Clapp Golf Couse. Our financial situation with the Golf Enterprise Fund is in a bad situation. We've lost money the past three years. We haven't made any debt payments in the past three years. It looks like it is only going to get worse. We have more golf courses than we have golfers coming to use them. There is a lot of overhead we are carrying. There is infrastructure repairs that need to be made. We want to make those reinvestments back into all of our facilities to make them first class, right now we are not able to do that. The way the Golf Enterprise Fund works is we use the revenues from all the golf activities to go back into the Golf Enterprise Fund and into infrastructure. The past several years we have not been able to do that, we have been using General Fund dollars. We purchased 242 golf carts with General Fund dollars. That is how dire the situation is. To continue with what the Mayor wishes were to continue with the operations of Clapp, we are at about a $425,000 jump to carry that portion for the golf course. Mr. Mark BOARD OF PARK COMMlSSIONERS SPECIAL MEmNG October 19, 2018 Page 1 of 16 Manning, Finance, is here to share a PowerPoint that illustrates some of the challenges we've had, the financial situation we are in and what the forecast is if we do or don't make some changes. Mark Manning, Department of Finance. Mr. Houtman asked him to give an update on the financial situation of the golf system. All of our courses continue to operate as forecasted, which is not good. LW Clapp is continuing to operate at a substantial loss. It has lost money the last three years and we expect that to continue. Based on current operating strategies funding for equipment and improvements is going to be a secondary concern for the golf system. The primary concern is going to be how to have adequate funding to keep the doors open. The focus of this presentation will be two things. One is having adequate cash flow to keep the doors open. The second problem is improvements, debt service and all of that. If you can't do the first one you don't need to worry about the second one. Operating cash flow is all the operating revenue we get from greens fees, golf carts and concessions, etc. Operating expenditures are the people, utilities, things that operate the club houses and maintain the courses. If you take the operating revenue and subtract operating expenditures, you get operating cash flow. Going back to 1988 (31 years), the blue line shows what operating cash flow has been. It has been quite good over the history. It has also been volatile due to weather dependency. Until you get to the last five years. Total cash flow in the last five years has been about $368,000 over five years. Cash flow in 2017 and 2016 was negative and expect that to be the same for 2018. Those three years of negative cash flow are the first three years since 1977 that we had negative cash flow. The impact of negative cash flow is not good it erodes our reserves. We have reserves but they are eroding fast, which means there is less flexibility and planning might shift away from strategic to more tactical. Lower reserves means it limits funds available for capital investment and leads to asset deterioration which ends up a vicious cycle. Looking at fund performance. The operating cash flows in the middle of the chart shows what it was 2016, 2017 and 2018. 2016 was negative $66,000, last year was about $188,000 negative. 2018 is estimated to have an operating deficit of $162,000. We do have a few other cash flows. That is primarily the sale of land. We sold some lots at Auburn Hills, which is what the $81,000 represents. Some of the circled amounts are the debt service amount paid in the last three years, all "Os" and also the new improvements to equipment amount $9,987 in the last three years. That is not what we need to replenish our equipment and make necessary improvements. The performance at LW Clapp continues to deteriorate. The other four courses generally are operating as we would expect. On the chart from the Exhibit in the Golf Sustainability Report you will find 2015-17. 2018 has been updated with what will probably happen. Expect LW Clapp to continue losses and lose more than last year. Expect the other courses to operate virtually the same as last year. In summarizing the last five years, the system lost money in two of the last five, 2016 and 2017 and will probably lose money this year. Four of the last five years are the worst years the golf system has had since 1977. LW Clapp has lost money every year BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 2 of 16 in the five year period since 2013 and will again in 2018. The system has no capacity to fund improvements, equipment or debt repayments. At the end of last year the cash reserves were $278,536. The cash reserves for a fund like the golf fund should be close to $1M. It was stated earlier the fund is expected to lose about $160,000 this year and expect the fund reserves this year to be about $100,000. The challenges the golf system has to continue current operations, if nothing changes, would require about $500,000 per year. To fund debt service, based on the most recent refinancing agreement will be $286,000. The Golf Sustainability Report identified needed capital improvements of about $26.4M. Houtman added a lot of this is due to the diminishing amount of golfers. This would be worse if we did not have the quality staff that are working hard to make this happen. We have changed marketing strategies, tried other discounts ideas and mechanisms to get people to come out. We have had more youth using our courses. There are other bright spots in adding more tournaments. As we do discounts the dollars per round go down and we are losing money as well. Something needs to change, we cannot operate and be sustainable in this situation. We are at the end of our rope. We are a skeleton crew, having cut back on positions, with staff working way beyond expectations to make it successful. If we did not do a lot of these things we would have seen this happen a lot sooner. Palmer asked how long we have been dealing with this. Eight years? Houtman responded when he started four years ago these are things we started talking about then. He does not know how far back it goes. There have been conversations going back before his time. Scot Rigby, Economic Development, You should have received an updated RFP based on feedback received at the last meeting, changing it from City of Wichita to Park Board, clarified 18 hole public golf course and adding clarification on some other minor details. The goal is to provide an opportunity for response to understand requirements: they would have to maintain it as an 18 hole golf course, open view fencing would be required and they have to honor or abide by the First Tee agreement, dated March 14, 2018. Houtman has an update on the Horizon Telecommunication park property. The lease is with the City of Wichita. Then in the event the potential buyer buys it and isn't performing, the Park Board has the opportunity to right of first refusal to purchase the property back. The cautionary note provided to the Park Board last time is we make it to the point where the property owner has bought it and is operating it and decides to close it for whatever reason, the Park Board would use that opportunity to repurchase it or decide not to purchase it. On the last page, if they put in a proposal they have put up 10% earnest money. If they are not selected that 10% will go back to them. Dates have been updated. Hillman asked Houtman if the changes he made to the recommendation on the cell tower, regarding Park Board will retain ownership of this site "at" Mac Park, rather than "and". Houtman responded yes. Houtman added there was a question from the last meeting regarding the proceeds of the sale and where they would go. It is BOARD OF PARK COMMISSIONERS SPECIAL MEmNG October 19, 2018 Page 3 of 16  your decision, staff would make the recommendation that those proceeds go back to the Golf Enterprise Fund, specifically for investments into the remaining golf courses. Palmer stated because you have $26M in deferred maintenance, correct. Houtman responded it would not necessarily be deferred maintenance, it is repairs, upgrades and infrastructure repairs. It is broader than deferred maintenance. Palmer opened up the discussion to Public Comment. He stated each speaker would have five minutes. Jason Fulghum, 12114 E Mainsgate - stated he has played various courses but mainly MacDonald. Would like to see this discussion be more proactive than reactive. Kansas City has website called lastminutegolfer.com. Certain tee times throughout Kansas City are hard to sell, those are discounted the morning of. There is something similar in Wichita, but none of the City courses are involved in it. You can get a discount at Sand Creek in Newton, Cherry Oak, you can go wherever. The City does not want to be part of it. It's a good way to get golfers out there. You speak about needing more golfers. There is a program called First Tee. It is helping get inner city kids, kids that aren't going to be exposed to golf, at the courses. They are doing a driving range at MacDonald. The whole point is there needs to be more proactive ideas. There is a reason why the potential buyer wants MacDonald. He does not want Clapp, he doesn't want any of the public courses. MacDonald used to be Wichita Country Club. It is the best layout of the golf courses in the city. Ask most golfers that live on the east side where they play. Maybe some play Clapp, you don't have Braeburn or Echo Hills anymore, you play MacDonald. MacDonald has a lot of history and is a great location. He has never played Auburn Hills, he's heard bad things and good things. He has played Tex Consolver. Of the public courses, your biggest asset is MacDonald. If you want to buy lots or sell lots, Auburn Hills' property value is much more than 13th and Oliver. The last minute golfer thing is something he likes to do in Kansas City because he doesn't have the finances to join a country club. Your rates at a Wichita public course are the same on Saturday at 9:30 as on Tuesday at 2:00. You can sell those for more on weekends than you can on a weekday. Dale Goter, 2625 W Cornelison - provided handout to board. In the course of this discussion they have engaged a group to look at this issue, it called the Wichita Public Golf Ad Hoc Committee. We want to be part of the solution and not part of problem. There are lots of questions they could not answer so put them in a document and submitted it to you. They have talked to Mark and he has answered a lot of them. On the chart he showed where the history of golf had a great era of revenues, we'd heard some of that money had been diverted in the past. That is not the case, it has always been reinvested to pay off improvements. It is interesting to hear that Auburn Hills has lots for sale, didn't know we owned property there as a revenue source. The revenue generated from that is going to be talked about that a justification for the City to contribute to the public golf system could made because the (inaudible) was so successful that the City profited a great deal with that revenue that did not go back to the golf course. One of the items left on their agenda is if you . consider supporting a dedicated public subsidy that would allow the courses to be sustainable, you are not running it like purely an enterprise fund. That is difficult and BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 4 of 16 it is hard to expect it to make that kind of money year in year out. Given the public service that is provided by a public golf course, economic development and quality of life are different than a country club. We recommend you delay the RFP process until the overall system study is conducted. The GAC recommended that and it has been glossed over. As a compromise, do the RFP in more comprehensive fashion and at the same time undertake the evaluation of the system. One key point talked about is perhaps it is time to think about bringing in an outside, objective consultant to look at the operation and to discuss different models of operation that might generate more rounds. One in particular is more emphasis on social golf. There is value in playing in men's clubs, tournament groups and leagues. Perhaps we are not doing as much about having a more aggressive effort to engage those groups, support them, encourage them and try to drive rounds up. We are all about the same goal, we want more people playing. With more revenue we would have a system that is viable and continues forward. We would like you to think about supporting forgiving the Auburn debt. The City makes so much money off that development that it is not out of the question to pay that off from those proceeds. The Manager explained it has to come out of the CIP, so there is a compromise along the way. Mark raised a lot of great questions, but at the end of the day we are not sure everything has been done that could be to generate golf rounds in Wichita. This study might identify some of those solutions that haven't been looked at: social golfing, promoting more tournaments. Rick Navarro, who organizes the Audie Navarro Tournament every year, has raised a quarter million dollars for golf scholarships for youth in the last few years. His history of interaction with the City has been less than ideal. We think you should have plenty of those tournaments, rounds would go up at golf courses and that's where cash flow gets improved on. One other point is the police/fire reserve payment every year, we would like to think about that one being considered for removal. Palmer stated the time limit had been reached. Richard Schodorf, 250 W Douglas - as a member of the Golf Advisory Committee he has seen the golf situation. The situation has changed. Golf in the US is a different animal than it was a year ago. The system as it is right now is not necessarily responsive to the way it needs to be run as enterprise fund. Decisions have to be made closer to the ground as to the expenditures being made and the way the course is conducted as far as getting the most bang for the buck. There was a decision four years ago regarding Clapp, had it been different, most of those numbers would have been considerably different. There was a variety of options and the option of doing nothing was selected. That really helped run us into a hole. We have proposals we are bringing forward. The Golf Advisory Committee is having a retreat and hope to interact with City staff to come up with proposals that should be looked at from an organizational standpoint on the decision making process for golf and also the budget proposals on the way the enterprise fund revenue should be spent. It should be run truly as an enterprise and right now it is a mixed bag, some of the money comes from golfers and some of it comes from the City. We do not have a clear picture of exactly what golf costs in the city of Wichita. Does not think Mark is showing a drilled down number. We can get to a drilled down number. We can get a proposal that will allow you to look at it from a go forward basis to see whether or not the sale of MacDonald is the right idea we don't know right now. Asking the Park Board to consider the BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 5 of 16 work they will be doing in November and to make sure you have all the information needed to make that decision. Those numbers are not available right now. The proposals are not available to you either. It is a "this is where we are and what need to do." Allow us the time to bring back a formal proposal to the board so you can ask questions so you have all of the information. Palmer stated you said the Golf Advisory Committee is prepared to do that. Why haven't you done it until now? Schodorf responded we have voted on and sent up numerous resolutions and requests and with few exceptions, never received any word back on anything. We believe we have wasted our three years. This is our last ditch attempt to try to make a change to the system. With Clapp, we voted, we sent individuals into the committee, we never received a single answer to anything we put forward, which was a complete plan. What to do proposing the sale of that particular piece of property; what we would do with the money; how we think you could benefit. We wanted dialog, and we received none. We•understand now and we appreciate Mr. Fahnestock's participation and Hillman did before, but we're down here and you are up here. What we are doing now is what has been suggested for three years. We need to develop it or we need to go away. You appointed us to give you advice and we have been giving you advice. We have a proposal now that would change the pass system that would bring more money to golf in Wichita. Clapp has to be repurposed. We have to shut off the red ink and we are not doing that. How decisions get made under the golf board is you have a piece of the pie, City Finance has a piece, the Fire Department has a piece, there is no central area where we can come to get decisions made. We might suggest something to you, we don't hear from the City, there has to be a set up where the golfers know what they can do if it were strictly an enterprise fund. Golf has to live within the budget of the enterprise fund. We had 200,000 rounds in City Golf when Auburn Hills was built. It was thought to be cash cow. That isn't the case anymore. We have paid back $1SM of the $20.SM loan. It should not have been that high. We had $8M that went to renovate other golf courses and $12M for Auburn Hills. We've paid off the $8M and most of the $12M. The problem is, going forward you have to look at golf as an enterprise. What is the level of support that it should have. If it needs to be strictly an enterprise fund system then you have change the way you look at it. You cannot have administrative costs that are nearly as high as ours are. It has to be able to bill out for services. The City could build into that or we'd use the bid system. You have to hold costs and say this the level we can afford to provide. Palmer asked you say you have this proposal ready now? Schodorf responded no, we are having a retreat November 27 and hope to have something to you by mid-December. We are inviting in City staff. We want to address reality on the ground. We want to make sure when it gets to you it is feasible. Palmer asked if the Golf Advisory Committee would be opposed to the RFP going out concurrent with putting that together, and before any decision are made hear your recommendations. Schodorf responded that would be wonderful. That would allow you to have that information that says what it would look like as a three course system, what you would look at as a four course or five course system and pay the bills. You deserve to know what it would look like and if the proposal has the same red ink it isn't going to excite you much. We are hoping to provide information. Palmer stated we understand. We need to decide if we put out an RFP concurrent with your work, if we could set the date. That would give you time BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 6 of 16 to go to your retreat on the 27th and come back, how long after that? Group response was two weeks. Schodorf stated he would like to allow it to be the middle of December to allow us to vote on the final proposal. Palmer asked if by the December Park Board meeting on December 10. Schodorf responded if we had a forum where we could have dialog with you, that is what we are looking for. Houtman stated they have been working hand in hand, was surprised by the comment that staff has not been supportive of the Golf Advisory Committee. We have worked hard to have that communication and to host lots of meetings and provide the information you have asked for and come up with ideas. We've spent a lot of time in dialog and explaining situations. His suggestion is instead of having the retreat on the 27th actually doing it sooner so we can fit it into this timeline a little better. That is more work for staff but would like to suggest it. Schodorf responded you are right but a lot of water went under the bridge before you got here. We did a lot of voting in the first two years. When we were formed, one of the first things we were to look at was whether or not to issue an RFP to have someone else take over the system. We looked at all of the options and said it was not a great idea. Then we moved on to the second proposal that was trying to come up with an alternative and that is where we hit the road block. It wasn't the Park Department, Hendricks did a wonderful job putting together a number of proposals they just never went anywhere, we never heard what happened to them. That is the communication line that we would like. Not to be critical of the City Park Department or Park Board, it the lack of communication and the system the way it is set up that has to be changed. Renard requested to see Manning's summary page slide again. Houtman suggested the GAC and staff work to provide their plan prior to the closing of the RFP. Schodorf responded he polled members present and they will find a date that is amenable to their members. Houtman asked Hendricks to schedule time to have the retreat sooner than expected but will also have all the information and data they requested. That plan should be completed prior to the closing of the Request for Proposal. Palmer asked if we could send out the Request for Proposal, if this board decides to, and not make any decisions until the GAC proposal is complete. Houtman responded that is for the board to decide how you want to evaluate that and how you want to put it into the RFP. Staff, working with the GAC, will have what they want to present to you prior to the closing of the RFP. Palmer asked if then we need to move the date back. Houtman responded no. We are going to have the retreat sooner, we are going to have that information sooner. We need to have that to the Park Board prior to the closing of the Request for Proposal. Cindy Renard, 1110 Royal Road - stated she is coming up with a net positive on the operating requirements on slide 8. Houtman responded it does not include all the internal charges that are put against the fund. Palmer inquired of Renard if she is asking a question? Renard responded yes, he said we are in the hole as a system, but these numbers presented show $282,520 in the black. Houtman responded this is showing each individual golf course performance, it does not include the entire golf enterprise system. He requested Mr. Manning to please explain. Manning stated all this is showing is the performance of each of the five courses. What it does not show BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 7 of 16 you is the performance of the system. The difference is the administrative costs the golf system has, for example golf course management is not allocated to the course, IT charges, credit card charges all those kind of charges are not allocated to each individual course. Palmer closed public comment and returned the discussion to the bench. Tabing asked about the administrative expenses. He is unclear about the trend over time. Have those been around since system started or have there been ups and downs over the years? Houtman responded they have always been included. The golf courses have always done very well. It indicates as we are moving forward in time we are not bringing in golfers that we used to bring in. The expenses are the same. We have actually reduced a lot of our expenses because we have less staff. We are reducing expenses regarding updating equipment and making repairs. Our expenses are declining relative to inflation and what the current costs are. Administrative fees have been calculated the same now as they were 10-15 years ago. Deatherage stated one of the biggest concerns she is hearing is the potential for development on the area. It keeps going back to the deed. You can't read half of the deed so how can we get clarification on or enforce that it will not be developed on at any point of the course, not just the holes but the club house, driving range. How can we make sure development is not an issue? Rigby responded our real estate group reviewed the deed and there is- no deed restriction on the property now. There was a deed restriction when the transfer came from the Wichita Country Club to the City. That deed restriction has fallen off. If you want to put a restriction on future development that is an option. As a cautionary note, you could say in this area we want no development to occur, it must remain a public golf course. But if you put it out there for potential sale and you have to retain the use of the public golf course, you want to make sure to have an opportunity to get the best return on the possible sale. For example, if someone wanted to do a reception center, you could designate a certain area to be available. They would have to go through the normal rezoning process for that use. There was a question about restricting development along 13th Street, you could put that as a restriction that there is to be no redevelopment along 13th Street frontage. For example, there is some excess property through the club house area, you could say that could be open for development. It could be restricted to complimentary uses comparable to the golf course. Palmer asked if that can be put in the RFP. Houtman responded you would put that in the contract. Tabing stated someone referenced hiring an outside consultant. Internally there is a lot of expertise between staff and this committee. Has there ever been a consideration for having outside eyes take a look at the system? Houtman responded when we were first having discussion regarding closing Clapp we talked about that suggestion. We looked at the cost of what that could be. We would have to find someone and hire them, which just means less dollars for us to use for what we need to get done. If the funding was there we would be happy to have a consultant come in. We would rather spend those dollars on something else. Tabing BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 8 of 16 stated the gentleman who spoke earlier talked about pricing to demand. Have those entrepreneurial ideas been entertained in the past? Houtman responded we have early bird rates, late evening rates and specials. Something we want to start incorporating with our app is to kick those prices out. We work very hard to find the right sweet spot where we are not losing money giving discounts. We have talked about it over and over with the Golf Advisory Committee, coming up with the Pass idea, some of the other competitors have. We have a guaranteed revenue stream if we have a pass. The proposed price is $65, which would be a monthly fee and you could play as much golf as you want. We would have that guaranteed revenue stream all year. We have been working on these things for the past six months, trying to find new ideas to make our program more efficient and bringing in more dollars when we most need them. Cabral stated Houtman had mentioned we had spent money on upgrading the courses and maintaining them for the past few years. Do we have a list of the repairs needed at all of the courses? Houtman responded yes. When we get a gift or extra cash, or when we apply for grants, we have always looked at different ways of trying to bring money in to make those infrastructure upgrades or repairs. We can't use grants for operations, but we can use it for upgrades for facilities. Last year was a great opportunity when we got the new golf carts. Palmer stated Schodorf said we owe $SM still on Auburn Hills. He also made the suggestion, hypothetically, of the City erasing that debt. Are we even paying that debt? We say we are not paying debt service, have we paid anything on that in the last three years. Houtman responded we have not paid anything in the last three years. Palmer added even if the City wiped out that $SM it is not going to increase our. ... Houtman added it only makes an impact when we are making, not just hundreds of thousands of dollars, but millions of dollars, making those repayments. If we make improvements incrementally $100k here $100k there, that does not get us to where we need to go. We need to either reduce our overhead and reduce the amount of courses we have; or find a whole lot more revenue. Palmer added because we are not making the debt service payment that $SM is irrelevant at this point. Houtman responded today we are not making that payment. It just extends it out instead of being a 30 year repayment it becomes a 40-50 year repayment. Deatherage stated financially it makes sense to not have MacDonald branded gear at the club house because we don't know what the future of this is. Can you request that it at least be stocked with the essentials to play golf? Houtman responded we made that happen already. With the unknowns regarding Clapp and MacDonald and moving staff around, it is the golf pros that make that investment, we didn't want them to make an investment then pull the rug from under them. We have made arrangements to have the necessities be there, gloves, balls, tees, etc. Palmer stated the point of this meeting was to decide if we were going to do an RFP, and if we are, what does this board want to see in it. Assuming we put out an RFP, are there any additions or subtractions that anyone would like to see. Deatherage had mentioned the deed and not being able to or need to make sure it is spells out in BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 9 of 16 the RFP that they cannot sell it. Fahnestock made the statement if this were to go out and if it were to be sold, if they run it into the ground could we put in recourse. Can we put in those recourses? Houtman responded that is something that is negotiated at the contract. Palmer added then we would not need to put that in the RFP. Fahnestock inquired if the Park Board is part of that contractual process. Houtman responded yes. Fahnestock added he is not saying a developer would run the course into the ground, Palmer added he just wants to make sure to protect ourselves. Houtman responded we do something very similar on a lot of facilities we rent. We put in the expectation that we expect the course to come back in the same condition, we put that into the contract. If it is not the same as we sold it to you and that is part of the contract we say we want some calculation to be in place with that. Hillman inquired about a potential timeline. If we get a bid back then spent time negotiating, would there be extra meetings involved in December, January, February and March to finish the negotiations. What are we looking at for time? Would this give the Golf Advisory Committee some more time to develop the master plan once they understood where we are? Rigby responded the typical RFP, when it is put out there, we can adjust the date as you see fit. Currently the submittal date is November 23. That is when submittals are in, then there would be a review committee, there has been discussion on if it would be the entire Park Board or a small group that reports back to the Park Board with overview and recommendations. It is how you want to structure that timeline. As far as our recommendation if you have a discussion about a retreat and you are weighing different opportunities, there is a value to understanding what is in the submittals, the amounts, the financial compensation they are willing to provide, that can help weigh your decision on how to move forward with the golf program on a macro level. Not just we did a retreat and here are our thoughts, without knowing the potential impact a sale could have. Palmer stated this committee, with the exception of Fahnestock, would not be part of that, it is the Golf Advisory Committee having the retreat. Rigby stated as for the RFP, it is up to the Park Board who serves on the selection committee. It could be the entire board, it could be a smaller group from the board or you could select staff to serve on the committee as well to review the proposals. That could be the recommendation from the entire board or the selection committee, you can then make the recommendation to accept one or reject them all or even go back out with further requirements. Palmer added we could decide that after we decide whether or not to do an RFP. Rigby responded yes. Whatever date you set as a submission deadline, you want to provide a reasonable timeline that they can expect an answer back. They are going to price it based on when they can take ownership and actually run the golf course. Generally you want to provide a 60- 90 day window when they are going to hear. Within 30 days after submitting proposals they are going to want to hear if they are shortlisted or not. Palmer stated we could provide that if we give them 60-90 days. Palmer stated if there was an RFP is there anything we want to make sure is there, Deatherage's recommendation on the development. Fahnestock stated he does not see any problem with development as long as it helps the golf course. Palmer expressed the need to define development, is that the club house, or are you talking BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 10 of 16 frontage. Palmer stated there is potential in a club house for if they want to do weddings and stuff. Is that considered development or is that remodel. Is it a zone change? Rigby stated it is up to the Park Board how you want to define that. For example, you could say in this area is the only area eligible for renovation or redevelopment. For lack of better areas, let's say that area south of the current club house is open for development, everything else is non re-developable. If you wanted to say the acceptable uses for development within that area could be X Y Z. If you wanted to put a prohibition something like residential or some other type of usage, you can put that in. Fahnestock inquired if there is any piece of the golf course that falls into an opportunity zone. Rigby responded he could pull it up if he was in his office. You can go http://www.wichita.gov/Economic/Pages/lncentives.aspx and pull up a map. Tabing inquired, if it is in an opportunity zone what does that suggest. Rigby responded it is a program where people can invest capital gains into new areas to prompt new and redevelopment into an area. The concept is individuals or groups who have allocations of excess capital gains can invest those into those opportunity zones with tax breaks. Hillman suggested we simply make a recommendation in the RFP that any developments on the 146 acres would be to the enhancement of the golf experience and just leave it at that. That gives them flexibility about where they would want to rebuild a new golf club house or anything else. Palmer responded he thinks we would need to be more restrictive and say if we are going to allow any kind of development it has got to be...that is a pretty gray area. If we are going to allow that, where. The club house would be about the only opportunity. Hillman stated we have already indicated we are going to keep all 146 acres as greenspace for the purpose of golfing. If not that should be part of that process. They may want to put another restroom out there and maybe some lighting. They may want to do a variety of things as long as it is golf related he does not have a problem with it. Cabral stated we are putting in the RFP that we want the 146 acres to remain greenspace for golf. What is stopping them, if the RFP goes through, what tools do we have to stop them from redeveloping along 13th Street. Rigby responded on purchase and sales agreement within that contract you can put certain deed restrictions or covenants that say this property can only be used for this. For example if you want to say in the sales agreement the property must be maintained as an 18 hole public golf course you can put that and that would be a deed restriction for the sale. So whether they took ownership and then tried to sell it again, that deed restriction would remain. Harlenske added if they started building a convenience store, in violation, you would have to go to court to get a temporary restraining order or stop the development. Rigby added the question is "they can do commercial development as long as it is complimentary. That is pretty broad. If you say "complimentary to golf' people can say that QuikTrip is complimentary to get a drink before or after, versus you say you want to do a reception center to do weddings and events. Or, the classic, an annual business retreat that is an hour business meeting and then they go play golf. You might have 10-12 suites that people can rent overnight for that corporate meeting. If you are going to talk about commercial development and you want to make sure it is the right type development, it might be good to say reception venue centers or small BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 11 of 16  types of uses. If you are concerned about the 13 th Street frontage, if you want to define a certain area that would be eligible for development you could do so. Palmer stated he talked to Ramsey, who is out of the country, he would like to see the RFP be restrictive in nature so that it cannot be further developed, maintain all greenspace as greenspace and always be a public golf course. Rigby stated the entire property is 146 acres. If the Park Board decides a certain portion could be redeveloped for golf complimentary uses that development could only happen within that portion of the 146 acres. If you are going to say certain areas are open, we just need to designate that. Palmer stated if we are talking RFP he would like to see it say the only redevelopment permitted and approved is the club house area and the bathroom. Rigby stated he would term that as essential to the public golf course. He does not think there would be opposition to having a restroom out on, for example, hole 9. It is the commercial development of certain property within that. Palmer stated he would like to see that added. Fahnestock asked how many square feet is eligible to be redeveloped. We have an 18 hole public golf course that falls on how many acres of land. Rigby responded 146. Fahnestock added he can't imagine anyone having too much commercial development land in general. We can put in there we want the frontage to remain a golf course, along 13th Street. The RFP, as is, is suitable. Houtman added in the RFP it mentions 7,500 square feet of club house. Also it speaks of in maintenance of approximately 7,500 square feet as well. Then . one restroom on the golf course is 320 square feet. Just a suggestion would be to use square footage amounts to help define some restrictions. Hillman inquired about how long it would take to tweak some of the items discussed today and get it back to us. Rigby responded could probably have something early to mid-next week. One thing we might be able to help this discussion about commercial is go back with Houtman and the map and call out and identify areas available for commercial redevelopment. That would give us square footage or size. Palmer added we can do that today. We don't need to reconvene. As long as it is spelled out the way we spell it out today, if we decide to move forward with this, we don't need another meeting. Fahnestock added we need to keep it moving. Candia Smith stated she has not heard anything in respect to the First Tee's agreement. Fahnestock responded it is already included. Smith asked with some specifics? Fahnestock responded yes. Deatherage added it says we honor their contract. Smith responded the contract is pretty open. There is not anything that says the kids have the right, the program can bring them in to play on the course. There needs to be something to protect them. Houtman asked Hendricks if the current agreement gives specifics right now for the amount of kids or the amount of time or special location. We were going to be working with them on a case by case situation. If this wasn't put in here they would have to work with the future owner to make that happen. Fahnestock responded yes. Houtman stated currently we don't have that in our agreement. Harlenske added there is a lease that will run with the land, that will have to be assigned through a formal process through the County and recorded. We also have a non-exclusive use agreement that sets for more specifics for the use of it. If this board wants to include that as well. It was referenced, is that BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 12 of 16 the intent to include the use agreement as well. There are two separate documents. Palmer asked if we can put that as part of in the RFP they take the lease, they will be able to negotiate on that lease when it is transferred and at that time First Tee can negotiate. Harlenske responded the lease does not have the use specifics in it. Palmer added as we assign this lease to the new owner, they would then have the opportunity with First Tee to negotiate dates or times. We don't have it in there now. Harlenske added your indication was that you wanted to have the new owner honor the terms of the lease as it is. There would be no negotiating. You are talking about the use and what they are allowed to do on the property. The lease is for the building and the land. The use agreement was for what would be charged for the kids to use. Hendricks added it explains how they can use the property. Harlenske added that would have to be renegotiated with the new owner. Palmer if First Tee wanted that specific in their contract they would have to negotiate. Hillman stated we can add a word where it says "any parties submitting a proposal agree to honor the First Tee of Greater Wichita's lease and student participation agreement. Harlenske stated that can go in there. She deferred to Mr. Rigby. It is not part of the lease. Rigby stated the question is the actual use of the golf course. One part is to say we are open to selling it and to put restrictions on where you can redevelop it. Now we are getting into how they can use that golf course. That gets into a difficult situation. If they are trying to run a golf course and make it profitable, the more restrictions and stipulations you put on about when how, who can and at what times becomes a very difficult thing for them to try to calculate as they are trying to present their proposal to us. Palmer stated that is why the Park Board didn't put it in our original proposal to them. Harlenske commented the lease we entered into with First Tee did have a provision that it runs.with the land and that it would be in perpetuity regardless of the owner. The use agreement has no such provision. Houtman stated it will be interesting to see if these bidders come back and are truly interested they will come back with information as part of their bid what they will do with First Tee. That will make their bid stronger and better if they include information on how they will interact, support and manage that. Harlenske added you could make it part of the RFP that they include in their presentation how they would accommodate First Tee usage. Palmer asked Tom West about his thoughts. West stated he agrees with Harlenske. Anything we can do in requiring some response from a potential buyer to give a general idea of what they want to do for First Tee. Our biggest concern is we have a relationship with the City and know what that is about. We have no idea what would happen with a new third party owner. If that can be clarified in the RFP, please do. Palmer stated we would have to ask them to come back with how they would respond to First Tee and their usage. Harlenske stated we say the lease is available for them to review, we should also make our use agreement available as well. Rigby added the use agreement is non-exclusive use on any of the City golf courses. Hendricks stated we have them at Tex Consolver and MacDonald. Harlenske added they are very similar. Whoever is looking at making a bid could look at it and we would like to see how they would accommodate this group. Palmer stated it is important to make sure First Tee is comfortable with this as well. Fahnestock agrees. If that can be included in the RFP would be terrific. It would give them a better understanding of whoever gets this, if we move forward, where they are going to be. Rigby asked for clarification the First BOARD OF PARK COMMlSSIONERS SPECIAL MEETING October 19, 2018 Page 13 of 16 Tee lease, dated March 14, non-exclusive use, we are asking them to respond how would they would interact and partner with First Tee on the usage. Deatherage stated it is going to take some time to spell this out specifically, so putting this out and letting people submit proposals, we still have room to negotiate, add the fine print, make sure First Tee is taken care of and go from there. Palmer added we also want to hear what the Golf Advisory Committee comes back with. All this would be concurrent. Goter inquired on the claw back if there is nonperformance and the City wants to provision for a resolution of that, if the City could buy it back from the developer. Rigby responded the way the current proposal from the Park Board is written is they have a right of first refusal. They can chose to purchase it back or they can chose not to take action or they can chose take other negotiation. Goter asked if you own the property with the exclusive right to sell it and you sell it, you don't have a bank account, the money goes to the City. Palmer responded no, the Park Board would like to see the money come back into the golf system. Goter responded but you don't control that financially. Palmer responded yes, we do. Harlenske responded it goes to the Golf Enterprise Fund. Goter asked if you have a bank account this money goes in to, that is under your control. Hendricks stated they do not have a bank account. Fahnestock stated he is trying to ask how are we going to buy this land back if we have to buy it back. Goter added if you have to go back then you obligate the City to put up the money to buy it back. Houtman stated that is the intent. How would we word that? Goter added how can you obligate the City, you couldn't spend the money until you grew that reserve to cover your claw back. It is a confusing area. If the money goes to the City, it's gone. Deatherage added that is part of what she is saying, the details that would be worked out if we decide to move forward. Goter stated he wonders if it is legal for you to obligate, you make the deal, you have total control of the sale, but once the money is there it appears you lose control of everything. Harlenske stated we can't obligate the City without Council approval. Palmer added we would need Council approval on top of all this information. Harlenske responded they don't need to approve the sale, but the claw back, yes, if we are going to use City money, but the Golf Enterprise Fund can buy property too. Goter points out the money would have to be held as a back stop in case we have to claw it back. The hope would be the system would be profitable and we would be building the reserve, should something like that happen. You are right it would probably need to be worded that it go to the Golf Enterprise Fund would have first right of refusal. Goter if First Tee is damaged in this process where does the fiduciary responsibility fall for that kind of liability. Harlenske stated she cannot answer that now, this is new ground. That is something we should look at and put in the contract if needed. Palmer stated but that is when we get to the contract. Right now we are talking about an RFP and what is in the RFP; that would not necessarily have to be in the RFP. Harlenske stated we might want to change the language that the City would have the right of first refusal to purchase the property. Palmer stated change it to the Golf Enterprise Fund has the right of first refusal. Harlenske stated we would BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 14 of 16 need the approval of Council to do anything else. Palmer stated if we decide to move forward with the RFP that would be in the contract and it could all get squashed at that point. Hillman asked if the City Council would have to approve the RFP? Palmer responded no, it is our property. Palmer motioned that we put out the RFP to sell the property at MacDonald Golf Course with the changes made today. And in concurrence with what the Golf Adviso ry Gommittee comes,up with. Fahnestock inquired if that should be two separate motions. Harlenske responded yes. Palmer restated the motion to put the RFP out for the sale of MacDonald Golf Course as changed today. Motion by Palmer, second by Tabing, IT WAS UNANIMOUSLY VOTED to put the RFP out for the sale of MacDonald Golf Course as changed today. (6-0). Fahnestock motioned that the Golf Advisory Committee will meet in the next few weeks to come up with a proposal and present it to the Park Board so that the Park Board has a better understanding of how everything matches up and what is going on. Harlenske stated you are making a motion that another board do something. Make it you will receive the proposal that is prepared by the Golf Adviso ry Committee and consider that information in connection with the RFP. Fahnestock restated the motion that the Deatherage second Motion by Fahnestock, second by Deatherage, IT WAS UNANIMOUSLY VOTED to receive the proposal that is prepared by the Golf Advisory Committee and consider that information in connection with the RFP. (6-0). Rigby asked for clarification as we draft the corrected RFP maybe clarify for staff is we have a submission deadline currently stated as November 23 and a final selection development team on or before December 10, do we need to adjust that. Fahnestock stated we can get it done. Tom West added the Golf Advisory Committee can do it. Fahnestock stated sometime before November 23 we will have it. Harlenske asked if there would be a special meeting to consider it because the next meeting is not until December 10 and that is the date the decisions are due. Rigby stated proposals are due November 23. What this says is the Park Board will make a determination on whether to accept a recommendation or reject or take no action, it is currently stating December 10 there will be a decision. When you put an RFP out, the response is when they need to know when to expect a response. Palmer stated we can get the RFPs and have them for December 10, the board will review and make the recommendation and at the same time we will have their recommendation and at that time we have to decide what direction we are going. Palmer stated there was a motion and a second and called for a vote. Motion by Fahnestock, second by Deatherage, IT WAS UNANIMOUSLY VOTED to receive the proposal that is prepared by the Golf Advisory Committee and consider that information in connection with the RFP. (6-0). Adjourn There being no further business, the meeting was adjourned at approximately 3:40 p.m. BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 15 of 16 The next regularly scheduled meeting will be held on Monday, November 19, 2018. BOARD OF PARK COMMISSIONERS SPECIAL MEETING October 19, 2018 Page 16 of 16