City re­news golf course con­tracts for restau­rant and pro shop ser­vices

Prairie Post (East Edition) - - Saskatchew­an - BY MATTHEW LIEBENBERG — mlieben­berg@ prairiepos­t. com

The City of Swift Cur­rent has re­newed the con­tracts for the op­er­a­tion of the restau­rant and pro shop ser­vices at the Chi­nook golf course for an ex­tended term.

Coun­cil­lors ap­proved the new five-year con­tracts, which are two years longer than the ex­ist­ing agree­ments, at a reg­u­lar coun­cil meet­ing, Oct. 22.

The cur­rent three-year con­tract with Ken Koster to op­er­ate the restau­rant will ex­pire Dec. 31 and the three-year con­tract with KK Golf Man­age­ment Inc. to man­age the pro shop con­cludes Oct. 31, 2019.

Koster has been op­er­at­ing the pro shop for the past eight years and he has been re­spon­si­ble for man­ag­ing the restau­rant for the past six years. The City amal­ga­mated the op­er­a­tion of the restau­rant and pro shop ac­tiv­i­ties in 2013 as a way to in­crease ser­vice lev­els for restau­rant and golf cus­tomers.

“What it's done is it has pro­vided a lot of syn­ergy be­tween the restau­rant and the pro shop,” City Gen­eral Man­ager Com­mu­nity Ser­vices Dean Rob­son said af­ter the meet­ing. “So pro­vid­ing the seam­less tran­si­tion be­tween the restau­rant staff and the pro shop op­er­a­tions is eas­ier un­der one op­er­a­tor than it is un­der two. Hav­ing said that, most are run with two, un­less they're semi-pri­vate or­ga­ni­za­tion. Then they just hire a man­ager that just over­sees both, but in this in­stance we're pretty for­tu­nate to have some­body who's been in­volved in both in­dus­tries for over 30 years.”

Dur­ing dis­cus­sions be­tween the City and Koster the two par­ties agreed to in­crease the length of the new con­tracts from three to five years and to end both agree­ments in the same year. Ac­cord­ing to Rob­son the longer term of the new con­tracts will pro­vide sta­bil­ity for both par­ties.

Both con­tracts still pro­vide the City with the right to ter­mi­nate the agree­ments dur­ing this pe­riod if it feels there is just cause to do so. The fi­nan­cial terms for the new agree­ments are es­sen­tially the same as for the cur­rent con­tracts.

The terms of agree­ment for the new pro shop con­tract spec­i­fies that the City will pay an an­nual re­tainer fee of $70,000 plus GST to the op­er­a­tor. In ad­di­tion, the City will pay 30 per cent of all rev­enue from tee off box and bench ad­ver­tis­ing to KK Golf Man­age­ment and the City will also pay eight per cent of in­come from green fees, passes, driv­ing range fees and ren­tal fees to the op­er­a­tor.

“Now keep in mind he has to pay for all his staff, all his as­sis­tant pros, all his cashiers,” Rob­son said. “They're not City peo­ple.”

The new con­tract for the restau­rant de­ter­mines that the op­er­a­tor will pay a monthly flat rate of $4,300 plus GST for the months of April to Oc­to­ber to the City. In the pre­vi­ous con­tract there was an in­crease of 2.38 per cent in the flat rate fee pay­ment to the City, but there will be no in­crease in the new con­tract.

The City de­cided to keep these fi­nan­cial terms the same be­cause the restau­rant has ex­pe­ri­enced an in­crease in ex­penses with­out a pro­por­tional in­crease in rev­enue due to weather con­di­tions.

The fee paid by the restau­rant op­er­a­tor to the City was pre­vi­ously based on a per­cent­age of rev­enue, which fluc­tu­ated from year to year. The flat rate pro­vides greater cer­tainty for both par­ties with re­gard to the bud­geted amount.

“So they could bud­get ap­pro­pri­ately and we could too,” Rob­son said. “When you hit a bad weather year, like we did this year, we're prob­a­bly in a very good sit­u­a­tion. If we hit an­other year, let's say next year is beau­ti­ful and we're golf­ing from April to Oc­to­ber and have lots of nice weather, then the City is prob­a­bly not mak­ing as much be­cause it's not a per­cent­age.”

The cost re­cov­ery rate for City fa­cil­i­ties will dif­fer by a wide mar­gin. In the case of the Chi­nook golf course any cap­i­tal costs will be cov­ered through pub­lic funds, but the re­cov­ery rate for op­er­a­tional ex­penses over the past 20 years had usu­ally been 100 per­cent, with the ex­cep­tion of about three years due to poor weather con­di­tions.

“The last two we've been sit­ting in a ter­ri­ble early weather pat­tern and this year was even worse than last year,” he said.

“April and May were prob­a­bly our worst start for golf green fee play­ers since 2013, where ap­prox­i­mately we had 3,500 rounds through April and May and our next worst year in April and May was 2013, where we had 3,800.”

The new five-year con­tract for the pro shop will end on Oct. 31, 2023 and the fiveyear term for the op­er­a­tion of the restau­rant will con­clude on Dec. 31, 2023. There is an op­tion to re­new both con­tracts if the two par­ties can reach an agree­ment on the terms.

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