2024-RFP-0394_Campus_Commons_Sample_Agreement.doc

TABLE OF CONTENTS

Page

CAMPUS COMMONS GOLF COURSE

PROFESSIONAL GOLF SERVICES MANAGEMENT AGREEMENT

TABLE OF CONTENTS

Page

1.

DEFINITIONS AND INTERPRETATIONS

1-3

1.01 Auditor

1.02 Cost of Goods Sold

1.03 Director

1.04 Facility Capital Improvement

1.05 Fiscal Year

1.06 Golf Course/Premises

1.07 Gross Receipts

1.08 Operations

1.09 Operating Budget

1.10 Operating Expenses

2-3

1.11 Revenues

2.

SPECIAL CONDITIONS

3-17 2.01 Campus Commons Golf Course Premises

3-4

A.

Use of Golf Course

B.

Manager’s Acceptance of Physical Condition

C.

Approval Required For Alterations

D.

No Property Interest of Manager

E.

Ownership of Improvements

F.

Signs

G.

County Fixed Assets

2.02 County's Responsibilities

2.03 Term and Holding Over

2.04 General Management of Golf Course Operation

5-7

General Terms

Manager's Personnel

Operating Budget

Manager's Expenses and Responsibilities

2.05 Golf Professional Pro Shop & Restaurant Services

7-8

Provision of Services And Equipment In

Pro Shop & Restaurant

Optional Services

Ownership of Inventory

2.06 Capital Improvement Program Management

Capital Improvement Program Fund

First Two Years Improvements

8-9 2.07 Advertising and Promotional Materials

2.08 Management Fees – Compensation to Manager

Base Management Fee – Operations

Incentive Fee – Operations

2.09 Accounting and Reporting Procedures

10-12

General Revenue

Operating Expenses

Operating Expense Reimbursement Procedures

Sales Taxes

11-12

E.

Inventory Valuation and Procedures

F.

Tournament Deposits

2.10 Financial Statements, Records and Reports

2.11 Retention of Records

2.12 Audit and Access To Manager’s Records

12-13 2.13 Security Deposit/Performance Bond

2.14 Permits and Licenses

2.15 Insurance

2.16 Remedies/Lack of Performance

2.17 Early Termination of Agreement For Cause

14-15 2.18 County’s Right to Terminate Agreement Without Cause

2.19 Manager’s Non-Compliance; Right to Enter And Make

Repairs; Use of Security Deposit/Performance Bond

15-16 2.20 Director’s Inspection

2.21 Subcontracts, Assignment

2.22 Conflict of Interest

2.23 Surrender of Premises

3.

GENERAL CONDITIONS

17-22 3.01 Authority of The Director

3.02 Term Clarification

3.03 Consent

3.04 Time of The Essence

3.05 Independent Contractor

17-18 3.06 Indemnification of County

3.07 Release of Liability

3.08 Taxes

Possessory Interest

Right to Contest Taxes

3.09 Notices

3.10 Notice of Claims And Suit

3.11 Applicable Law

3.12 Nondiscrimination Clause

3.13 Compliance with AB 1663 And AB 2986

3.14 Compliance

3.15 No Warranty Regarding Golf Course

3.16 Entire Agreement

3.17 Non-waiver of Rights

3.18 Force Majeure

3.19 Headings

3.20 Contractor Identification

3.21 Compliance with Child, Family And Spousal

Support Reporting Obligations

3.22 Benefit Waiver

3.23 Amendment

3.24 Successors

3.25 Interpretation

3.26 Disputes

3.27 Prior Agreements

3.28 Duplicate Counterparts

EXHIBITS TO AGREEMENT

Campus Commons Golf Course Site Map and Operation/Premises

County Fixed Assets Inventory

C.

Manager’s Intended Organizational Structure and Staffing Plan

D.

Manager’s Expenses Items

E.

Manager’s Method of Operations Plan

F.

Facility Improvement Plan

G.

Base Management and Incentive Fees

H.

Financial Statements, Records and Reports List

I.

County of Sacramento’s Insurance Requirements J.

Manager’s Background Screening Policy

CAMPUS COMMONS GOLF COURSE

PROFESSIONAL GOLF SERVICES MANAGEMENT AGREEMENT

THIS AGREEMENT made and entered into as of this 1st day of January, 2017 by and between the COUNTY OF SACRAMENTO, a political subdivision of the State of California (hereinafter "COUNTY"), and___________, Inc, a California corporation, as the managing general partner of Campus Commons Golf Partners, a California limited partnership (hereinafter “MANAGER”).

WHEREAS, the COUNTY is the owner of Campus Commons Golf Course (hereinafter "Golf Course"), located at 4103 Zinfandel Drive, in Sacramento County; and

WHEREAS, the COUNTY is responsible for the operation of the Golf Course for the use and benefit of the public; and

WHEREAS, COUNTY desires a professional MANAGER capable of assuming the operation of the Campus Commons Golf Course; and

WHEREAS, said professional MANAGER must also be capable of providing (1) an accounting to COUNTY of all receipts and disbursements and (2) operation facilities and equipment, all in accordance with provisions of this Agreement as negotiated by said professional MANAGER and COUNTY; and

WHEREAS, MANAGER is engaged in a professional golf management services business, and is prepared, equipped and qualified to provide services required hereunder at the golf course; and

WHEREAS, MANAGER has successfully managed the Operations of Campus Commons Golf Course for many years; and

WHEREAS, MANAGER was selected by the COUNTY after a public, competitive bid process.

NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions herein contained, the parties hereto agree as follows:

1.

DEFINITIONS AND INTERPRETATIONS

As used herein, the following words and phrases shall have the meanings set forth below:

1.01 Auditor

“Auditor” means employee(s) of the County of Sacramento’s Auditor's Office or Department of Regional Parks accounting staff, or authorized representative(s) of an independent Certified Public Accounting firm retained by COUNTY.

1.02 Cost of Goods Sold

“Cost of Goods Sold” means the cost paid by MANAGER for goods sold at the Golf Course, and shall be determined by generally accepted accounting principles consistently applied.

1.03 Director "Director" means the Director of Regional Parks of COUNTY, and any of his/her authorized representatives.

1.04 Facility Capital Improvement

“Facility Capital Improvement” means any construction project in excess of $25,000, which extends the useful life and/or increases the capacity of the Golf Course facilities. For the purpose of this Agreement, weeding and normal replacement or renovation of sod grass shall not be considered “Facility Capital Improvement.”

1.05 Fiscal Year

"Fiscal Year" means the COUNTY fiscal year, commencing July 1 and ending June 30.

1.06 Golf Course/Premises "Golf Course/Premises" means the Campus Commons Golf Course located at 4103 Zinfandel Drive, in Sacramento COUNTY and/or any area where MANAGER's golf course management activities are carried out with regard to this Agreement. The “Golf Course/Premises” is described in Exhibit A, attached hereto.

1.07 Gross Receipts

"Gross Receipts" means MANAGER’s gross revenue from all sales and services made or provided for the County of Sacramento, in connection with MANAGER's operations at the Golf Course Snack Food and Beverage Service, as otherwise provided under the terms and conditions of this Agreement, whether made or provided upon the basis of cash payment or on credit (whether collected or not); provided, however, there shall be excluded or deducted, as the case may be, from Gross Receipts the following:

a) All sales taxes, and retailers' excise taxes, paid or collected by or payable by MANAGER.

b) All sales taxes, and retailers' excise taxes, paid or payable by COUNTY.

c) All bona fide credits or refunds made by MANAGER to customers in regard to merchandise sold or services provided by MANAGER.

d) All sums or credits received in settlement of claims for loss or damage to COUNTY-owned merchandise and assets.

1.08 Operations “Operations” means the business and commercial operations and affairs in the ordinary course of business of the Golf Course.

1.09 Operating Budget “Operating Budget” means a plan of all estimated revenues and all estimated expenses attributable to COUNTY for golf operations at Campus Commons Golf Course for each Fiscal Year, or partial Fiscal Year, period under the term hereof, as developed by MANAGER and formally adopted by the COUNTY Board of Supervisors. The “Operating Budget” shall include all estimated expenses for which the COUNTY will be responsible for paying (either by direct payment or by reimbursement to MANAGER for expenditures incurred on behalf of COUNTY). The “Operating Budget” shall not include those operations or professional services management related expense items for which MANAGER is responsible for and is solely obligated to pay as defined in Section 1.10, "Operating Expenses".

1.10 Operating Expenses “Operating Expenses” include all costs and expenses necessary to the operation and maintenance of the Golf Course, Snack Food and Beverage Service. Such “Operating Expenses” shall include, but not be limited to, the following: the cost and fees of the Auditor; insurance (with terms and limits as required by COUNTY); MANAGER's base management fee and incentive fee; the cost of salaries, wages and benefits of the MANAGER's employees to be borne by COUNTY; and all equipment, supplies, materials and merchandise inventory necessary for Golf Course Snack Food and Beverage Service for which MANAGER shall be responsible for procuring and maintaining on behalf of COUNTY in accordance with the provisions of this Agreement. “Operating Expenses” shall be determined in accordance with generally accepted accounting principles consistently applied.

1.11 Revenues

“Revenues” means all operating revenues received on behalf of COUNTY from the Golf Course and related facilities such as revenue from green fees, snack food and beverage services, and other miscellaneous revenues or sales/rebates agreements for sales.

2.

SPECIAL CONDITIONS

2.01 Campus Commons Golf Course Premises A.

Use Of Golf Course

The Golf Course premises, as shown on the site map which is a part of Exhibit A, shall be used only and exclusively for Golf Course Operations and for such other, related purposes for which express approval is granted by the Director, and for no other purpose whatsoever.

MANAGER shall not execute any chattel mortgage, conditional bill of sale, financing statement, lease or security agreement pertaining to the Golf Course or any Golf Course improvements, furniture, fixtures, fittings and equipment in such premises without the prior written consent of the Director.

B.

MANAGER’s Acceptance Of Physical Condition

MANAGER acknowledges personal inspection of the Golf Course, Club House, and other related facility Operations premises and the surrounding area and evaluation of the extent to which the physical condition thereof will affect the operation of the Golf Course.

C.

Approval Required For Alterations

Any improvements, additions, alterations or changes to the Golf Course, Club House, and other related facility Operations premises, whether in whole or in part, shall be subject to prior written approval by the Director, securing of applicable permits and compliance with such terms and conditions as may be imposed thereon by COUNTY, State, Federal, and all other local regulatory agencies, including without limitation, compliance with the California Environmental Quality Act.

D.

No Property Interest Of MANAGER

MANAGER hereby acknowledges the title/lease interests of COUNTY in and to the Golf Course, Club House and other related facility Operations premises and the equipment and improvements located thereon, and covenants and agrees never to assail, contest or resist said title, nor to assert with respect thereto any property interest to the Golf Course.

E.

Ownership Of Improvements

Ownership of all existing structures, and of all structures, buildings and/or improvements constructed by COUNTY or by MANAGER upon the Golf Course premises and all alterations, additions or betterments thereto, shall immediately vest and be vested in COUNTY at all times during and after the term hereof. COUNTY shall retain at all times the right to possession of such structures, buildings and/or improvements.

F.

Signs MANAGER shall place no sign, emblem, or advertising, of any kind or character, at or on the Golf Course without the advance written approval of the Director.

G.

COUNTY Fixed Assets

COUNTY shall permit MANAGER to use whatever COUNTY-owned equipment it has in place, or may subsequently place, at such facility. Any such equipment used by MANAGER shall be taken "as is", inventoried, repaired or renovated, reasonable wear and tear accepted, if necessary, and returned to COUNTY at the end of the term or earlier expiration of this Agreement.

2.02 COUNTY's Responsibilities

COUNTY shall perform the following:

A.

Administer all terms and conditions of this Agreement;

B.

Monitor standards and specifications;

C.

Review and approve the Golf Course Operating Budget and reimburse MANAGER for Operating Expenses as approved by COUNTY in COUNTY's annual budget;

D.

Review and approve or disapprove, in advance, any and all expenses not previously budgeted;

E.

Review and approve or disapprove, in advance, any improvements, changes or alterations to existing Golf Course or Club House;

F.

Provide, or make provision for, all equipment which, in the sole opinion of COUNTY, is needed by MANAGER to operate the Golf Course including Club House, and Snack Food and Beverage Operations;

G.

Set all fees; and H. Determine, approve and fund capital improvements, as funds are available 2.03 Term and Holding Over A.

The term of this Agreement shall begin on January 1, 2017 and shall expire on December 31, 2021, 11:59 p.m. Pacific Standard Time.

B.

The provisions of this Section 2.03 are subject to the provisions of Section 2.18, which authorize the COUNTY to terminate this Agreement, without penalty or cause, upon ninety (90) days' written notice given to MANAGER.

C.

Should MANAGER continue to operate the Golf Course Operation after the expiration of the term of this Agreement with the expressed or implied consent of COUNTY, such action shall be deemed to be on a month-to-month basis at the same compensation rates as were applicable to MANAGER’s operations during the term hereof pursuant to Section 2.08(A) of this Agreement.

2.04 General Management of Golf Course Operation A.

General Terms

MANAGER shall have the exclusive right, license, privilege, and duty to operate and maintain the Golf Course Operation.

1. MANAGER understands and covenants that COUNTY is retaining MANAGER for expertise in providing efficient operation and maintenance of Golf Course Club House of a high quality, for maximizing revenues within the limits of a public facility, and for minimizing expenses, and for meeting customer expectations. MANAGER recognizes that its operation hereunder is a service to users of the Golf Course and the public. MANAGER shall conduct its operations in a professional, businesslike, efficient, courteous, and accommodating manner. The Director shall have the right to make reasonable objections to the quality and character of articles sold and services provided to the public, the prices charged and the appearance and condition of the premises utilized by MANAGER for its operations. MANAGER shall promptly discontinue or remedy any such objectionable practice upon notification by the Director.

2. MANAGER shall be responsible for providing all services, equipment, supplies and personnel for the administration, staffing, operation and maintenance of the Golf Course and Club House, and such other locations at the Golf Course as the Director may from time to time specify for MANAGER’s operations.

3. MANAGER shall use its best efforts to develop and maintain cooperative working relationships with golf organizations, tournament promoters and other interested organizations in order to provide the best programs and services possible for the public.

4. MANAGER shall participate in meetings with the Director or his/her assigned designee(s) to review and evaluate revenue generated from Green Fees, and Club House Snack Food and Beverage sales. Said meetings shall also include the evaluation and review of expenditures, rounds played and growth of the business.

B.

MANAGER’s Personnel

1. General Manager

MANAGER shall designate a “Class A, P.G.A. Professional” or other staff member as the General Manager (hereinafter “GM”) for the overall supervision of all MANAGER’s personnel and day-to-day activities and operations at the Golf Course. If GM does not possess Class A, P.G.A. Professional status, another staff member must possess this classification. The designated GM shall be authorized to act for MANAGER in all aspects of MANAGER’s day-to-day operations. MANAGER shall notify Director when there is a change in the assignment of a GM, or if the GM will be absent from the golf course for longer than 15 days.

2. Golf Professional

A "Class A, P.G.A. Professional" or “Apprentice Professional” (So long as the GM has a P.G.A. Class A Certification) shall provide activities and programs that teach golf.

3. Golf Course Superintendent

MANAGER shall provide and maintain its employ in accordance with the approved Operating Budget, a GCSAA-recognized Class “A” golf course superintendent who has a minimum of four years’ experience at an 18-hole championship golf course. Said golf course superintendent shall be responsible for supervising all of MANAGER’s Golf Course Maintenance personnel, and shall be on site a minimum of forty (40) hours per week, or as otherwise approved at the discretion of the Director. The designated Golf Course Superintendent shall be assigned by MANAGER to the Golf Course for not less than the first three (3) years of this Agreement, unless removal or transfer is approved in advance by the COUNTY.

4. Food and Beverage (Restaurant) Manager

MANAGER shall provide and maintain in its employ a Restaurant Manager who has a minimum of three-(3) years experience in the management of food and beverage operations. Said Restaurant Manager shall be responsible for supervising all of MANAGER’s food and beverage services personnel.

5. General Provisions - MANAGER’s Personnel

a) MANAGER shall staff its operations with personnel in sufficient number to meet public demand for prompt, courteous, and efficient service. MANAGER’s organizational structure and intended staffing plan for meeting its obligations hereunder is attached as Exhibit C. MANAGER shall adjust the number of its assigned personnel, or its hours of operation, as may be requested from time to time by the Director to meet customer demand, respond to revenue shortfalls, or other operational needs. Director or Director’s appointed representative reserves the right to interview MANAGER’s top personnel and participate in MANAGER’s interview process of said personnel.

b) MANAGER’s personnel shall at all times while on duty at Golf Course be clean and neatly groomed, courteous, efficient, and attired in a suitable uniform.

c) MANAGER shall at all times maintain a high standard of services to the public, to the satisfaction of the Director, who shall be the sole judge of the adequacy thereof. Upon written notice by the Director that the conduct of any of MANAGER’s personnel at Golf Course is detrimental to the best interests of the public, or to COUNTY, MANAGER shall, within twenty-four (24) hours thereafter, furnish evidence satisfactory to the Director of correction of such deficiency.

C.

Operating Budget

On an annual basis, MANAGER shall submit to Director for formal COUNTY approval an Operating Budget which provides sufficient detail for each budget line item contained therein. The Director will establish a timeline for the annual budget submission and amendments to the annual budget. It is MANAGER’s responsibility to monitor its adherence to the approved Operating Budget on an ongoing basis, and to obtain prior COUNTY approval for any significant deviation from the Operating Budget. Any expenditure not formally included in the Operating Budget or approved by COUNTY as an Operating Budget adjustment shall be considered a "MANAGER’s Expense" item, for which MANAGER assumes sole and full responsibility.

D.

MANAGER’s Expenses And Responsibilities

“MANAGER's Expense(s)” include those expenses which are not Operating Expenses but, rather, are the sole responsibility of MANAGER (Exhibit D) and which are not subject to reimbursement to MANAGER by COUNTY, in that such expenditure(s) are incurred exclusively for the management of the Golf Course Operation and have been identified by both the MANAGER and COUNTY as the sole responsibility of the MANAGER; and, such expenditures have not been formally included in the COUNTY-approved Operating Budget or have not been approved through formal Operating Budget adjustment(s). Should MANAGER and COUNTY disagree regarding whether a particular expense item is a MANAGER's Expense or an Operating Budget expense, the Director's decision shall prevail.

2.05 Golf Professional Snack Food and Beverage Service, & Maintenance Services A.

Provision of Services And Equipment MANAGER shall comply with the Method of Operations Plan approved by the Director and attached as Exhibit E, which shall be consistent with the County of Sacramento Golf Division Policy and Procedure Manual, a copy of which can be found on the Parks Department website at www.regionalparks.saccounty.net/Pages/Golf.aspx, and as may be amended from time to time throughout the term of this Agreement. The Operations Plan will be reviewed by the Director on an annual basis, and may be modified by the Director to meet customer demand, respond to revenue shortfalls, or other operational needs. The Operations Plan includes Merchandise, Course Maintenance, Golf Course Marshals, and Food and Beverage services.

B.

Optional Services MANAGER shall have the right of first refusal to provide such appropriate optional services, if any, as may from time to time be requested by the Director. The need, demand, nature and extent of such optional service shall be determined by the Director, at his/her sole discretion. Should MANAGER decline to provide any such service upon request by the Director, MANAGER acknowledges that the Director will proceed to make such other arrangements therefore as deemed by the Director to be appropriate, and MANAGER shall make no claim or assertion of any further right or entitlement with respect to such matters.

2.06 Capital Improvement Program Management A.

Capital Improvement Program Fund

COUNTY shall establish and hold monies in an established interest-bearing Capital Improvement Fund for capital improvement projects. Said monies shall be allowed to accumulate in the Capital Improvement Fund, bear interest, and rollover to the following fiscal year.

Prior to the beginning of each fiscal year, the MANAGER shall submit a schedule of capital improvements proposed for inclusion in the Golf Course Operating Budget. Said schedule of proposed capital improvements will be subject to COUNTY approval and available funding. At the Director’s discretion, the MANAGER may be responsible for obtaining bids, securing a contractor to complete the project, and compiling and implementing a capital improvement project plan. This project plan will be approved by the Director and outline all contractors to be hired, their contract budgets, and a timeline for the completion of the project.

First Years Improvements

MANAGER shall make within first year of the Agreement, and at MANAGER’s sole expense fifty thousand dollars ($50,000) in facility improvements as outlined in Exhibit F and provide documentation to verify actual costs for said facility improvements. MANAGER and the COUNTY will meet to finalize and schedule the suggested Capital Improvements. Should it be necessary to cancel said Agreement between the MANAGER and the COUNTY within the term specified in Section 2.03, and in accordance with Section 2.18, County’s Right to Terminate Agreement Without Cause, MANAGER shall be entitled to a pro-rated reimbursement of Capital Improvement costs as agreed upon by the MANAGER and the COUNTY.

2.07 Advertising and Promotional Materials MANAGER agrees to advertise and promote the facilities operated by MANAGER to foster a favorable business environment, stimulate patronage, and support COUNTY efforts to maximize use of the Golf Course. MANAGER shall develop an annual plan for advertising and promotional materials to be approved by Director or Director’s designee. The plan shall include types of materials, methods for advertising, and a timeline for release of advertisements and promotional items. Such materials include, but are not limited to, advertising in newspapers, magazines and trade journals, websites, emails, and radio and/or television commercials. The first year plan is included as Exhibit E, and shall be updated each year and approved by the Director.

2.08 Management Fees - Compensation to MANAGER A.

Base Management Fee - Operations MANAGER shall be paid a guaranteed, Base Management Fee of six thousand six hundred twenty five dollars ($6,625) per month in the first year of this Agreement. The Base Management Fee shall be adjusted annually thereafter on January 1 of each and every subsequent year of the term of the Agreement and any hold over period following expiration of the term of this Agreement by two percent (2%). MANAGER shall submit an invoice to COUNTY for payment of MANAGER’s Base Management Fee, payable to MANAGER on the fifteenth day of each month thereafter throughout the term and any hold over period of this Agreement. Said monthly payments shall be included and clearly identifiable in the statement of finances submitted to COUNTY each month by MANAGER, in accordance with provisions contained in Section 2.10 of this Agreement.

B.

Incentive Fee - Operations

An Incentive Fee program has been established as a form of additional compensation to encourage growth of revenues over the term of the agreement. The Incentive Fee is subject to the conditions as specified in Exhibit G of this Agreement.

1.

The amount of Incentive Fee paid to MANAGER shall be equal to six percent (6%) of Gross Receipts exceeding the Base Revenues identified in Exhibit G. Said Incentive Fee payment shall be due and payable to MANAGER thirty (30) days after COUNTY’s receipt of MANAGER’s annual financial statements.

2.

The amount of the Incentive Fee paid to MANAGER shall not exceed 50% of the annual total of ($79,500 in year one) Base Management Fee payments paid to MANAGER pursuant to this Section 2.08(A) for the same fiscal year accounting period.

3.

MANAGER shall not be authorized to issue checks from the COUNTY Bank checking account or draw funds from the credit line for payment of any MANAGER’s Base or Incentive Management Fees provided for under the terms of this Agreement. Said management fee payments shall instead be processed solely by COUNTY and remitted directly to MANAGER.

2.09 Accounting and Reporting Procedures A.

General Revenue

1. MANAGER is required to remit one hundred percent of Gross Receipts from all operations, except for the alcoholic beverage sales, at the Golf Course into an account established with COUNTY Treasury through COUNTY approved bank.

2. MANAGER shall prepare bank deposit slips on a daily basis for all such monies (including sales taxes, where applicable) collected by MANAGER, with the deposit date clearly marked on each deposit slip. With each bank deposit, MANAGER is also required to prepare a Sacramento COUNTY Deposit Permit Form to code all revenue deposits by date and type of revenue for proper identification by the COUNTY Treasury. A separate line is to be used on the Deposit Permit Form to record green fees, gift certificate deposits, tournament advance reservation deposits and Food and Beverage Operation revenue. The MANAGER shall arrange for deposits on a regularly scheduled basis.

3. MANAGER shall be responsible for, as a MANAGER’s Expense, any annual net cumulative revenue reconciliation shortfall from daily operations and any returned checks/credit cards which have accrued during each Fiscal Year period, as billed by the COUNTY at the end of each Fiscal Year or partial Fiscal Year period of the term of this Agreement.

4. MANAGER is required to submit various supporting documents to the Department as outlined below:

a. Green Fee Revenue:

MANAGER shall provide a daily summary sheet which is attached to the tee sheet report which documents the accounting for both totals on a fee category by fee category basis and the resulting total payment due to the COUNTY. MANAGER is required to submit tee sheets reports and a variance report directly to the Department on a weekly basis.

b.

Food and Non-Alcoholic Beverage Revenue:

MANAGER is required to prepare and submit a monthly recap which details food and non-alcoholic beverage sales revenue by the following specific categories: gross revenue, sales taxes, food sales, non-alcoholic beverage sales, and catering. MANAGER is required to submit copies of deposit slips for food and non-alcoholic beverage revenue directly to the Department on a weekly basis. These deposit slips must be clearly marked with the sales date and indicate that it represents food and non-alcoholic beverage revenue.

B.

Operating Expenses

MANAGER is responsible for the purchasing of all equipment, supplies, materials and merchandise used in the maintenance and operation of the Golf Course as authorized by the approved fiscal year Operating Budget. In order to facilitate these purchases, MANAGER is required to establish a checking account and a line of credit in the amount of $100,000 with County approved bank under MANAGER’s business entity name for payment solely of Golf Course operating expenses. MANAGER will issue checks for payment of Golf Course operating expenses from the County approved bank checking account. Only authorized Golf Course operating expenses can be paid from this account. MANAGER’s Expenses or any other type of expenses (including, but not limited to, expenses for procurement of the alcoholic beverage inventory) are not allowed to be paid from the County approved bank checking account. It is the responsibility of MANAGER to take advantage of all available discounts and other prompt pay strategies. MANAGER will be responsible for monitoring adherence to the approved Operating Budget. MANAGER understands and agrees that all purchases are subject to approval by COUNTY and that any purchases made outside the approved fiscal year budget will be considered "MANAGER’s Expenses" and will not be reimbursed. It is the responsibility of the MANAGER to obtain prior written approval from COUNTY for all expenses that are not in the approved fiscal year Operating Budget.

C.

Operating Expense Reimbursement Procedures

MANAGER shall submit original invoices to the COUNTY in a timely manner but no less than once a month for the purpose of documenting all Operating Expenses, with the exception of payroll expenses. MANAGER will separately document and submit all payroll expenses to the COUNTY on a bi-monthly basis. All Operating Expenses must be paid from the County approved bank checking account prior to submission of invoice documentation to the COUNTY. MANAGER is required to write the County approved bank check number and general ledger expense account number on each original invoice prior to submission to the COUNTY. The COUNTY shall review these invoices and, if reimbursement is approved, shall process an interbank transfer to pay down the County approved bank credit line for the amount of the approved Operating Expenses. COUNTY will use its best efforts to reimburse expenses within fourteen business days from the date of invoice submission, depending upon the available funds in the COUNTY Golf Fund. MANAGER is responsible for the submission of bank invoices for interest charges assessed on the credit line each month. The COUNTY shall pay these charges along with the other approved expenses.

MANAGER agrees that those employees of MANAGER whose salaries are paid from the Operating Budget shall not be reassigned from their normal Golf Course duties without full reimbursement to COUNTY at the full hourly rate of salaries including benefits by MANAGER.

D.

Sales Taxes

1. MANAGER is responsible for the collection of sales taxes from all Food and Beverage Operations at the Golf Course. MANAGER shall remit 100% of sales tax monies to the COUNTY. MANAGER shall complete, on a monthly basis or as otherwise outlined by the Board of Equalization, a Sales and Use Tax Prepayment Form for all sales. MANAGER shall be responsible for the prompt filing of these returns and remitting all sales tax prepayments on behalf of the COUNTY.

2. MANAGER shall also complete, on a quarterly basis, or as otherwise outlined by the Board of Equalization, a State, Local & District Sales & Use Tax Return. MANAGER shall submit said return, with accompanying check for all sales taxes due, to the Department for signature and mailing.

3. MANAGER shall be solely responsible for the completion of filing of return form(s) and directly remitting to the Board of Equalization all sales taxes collected as part of its alcoholic beverage concession operation, in accordance with the terms and conditions of this Agreement.

E.

Inventory Valuation And Procedures

MANAGER shall be responsible for compiling and maintaining a complete and accurate Food/non-alcoholic Beverage inventory listing that may be reviewed by the Director or Director’s designee upon request.

F.

Tournament Deposits

MANAGER shall collect and retain all tournament deposit monies on behalf of the COUNTY.

2.10 Financial Statements, Records and Reports

MANAGER shall prepare and maintain, in accordance with the approved Operating Budget , an adequate set of Golf Course operating records, financial statements and reports in detail and methodology satisfactory to the Director and the COUNTY Auditor, documenting all MANAGER’s revenue and Operating Expenses pursuant to this Agreement. Financial records shall be kept in accordance with generally accepted accounting principles Specific reports are detailed in Exhibit H.

2.11 Retention of Records MANAGER shall retain all its books and records of account for the term hereof for not less than four (4) calendar years following the last day of such term. Such books and records of account shall show all MANAGER’s revenue receipts, commissions, and other income derived from its operations, pursuant to this Agreement, all deductions there from, supporting documents, and all other information required by this Agreement. MANAGER shall retain such books and records of account at a location within the COUNTY of Sacramento, and shall keep and maintain the records in accordance with accepted professional accounting principles.

2.12 Audit and Access to MANAGER's Records Upon written notification by COUNTY, MANAGER shall make all of its financial records available to COUNTY at the business office of MANAGER including, but not limited to, general ledger, original entry journals, cancelled checks, invoices, bank statements, federal and state payroll and income tax filings and financial statements. MANAGER shall provide such access to its records for COUNTY's purposes in verifying information submitted by MANAGER in any report or financial statement required or requested of MANAGER pursuant to this Agreement, and for COUNTY's purposes in verifying MANAGER’s compliance with the terms of this Agreement, but for no other purpose. Further, at any time within four (4) calendar years following the last day of the term hereof, upon written notification to MANAGER, COUNTY may, at its sole cost and expense, inspect, audit, and copy MANAGER’s books, records of account, and supporting documentation relating to MANAGER’s operations at Golf Course and related facilities. COUNTY, its agents, or auditors may inspect, audit, and copy such books, records of account, and supporting documentation for COUNTY's purposes in determining the correctness of revenue and expense figures as presented in the monthly summary of operations or the annual financial statements submitted by MANAGER pursuant to Sections 2.09 and 2.10. If any such inspection and audit establish that additional funds are due to COUNTY, MANAGER shall pay the same within thirty (30) days following demand with interest from the date such amount was due COUNTY. In the event of a discrepancy of more than three percent (3%) between MANAGER’s gross receipts, commissions, or other income as established by such inspection and audit, and such gross receipts, commission, or other income as reported by MANAGER pursuant to any financial reports submitted by MANAGER to COUNTY, MANAGER shall, upon demand, reimburse COUNTY for all its costs in connection with such inspection, audit, and copying. MANAGER further agrees to allow COUNTY to review its partnership financial records and books on Golf Course operations.

2.13 Security Deposit/Performance Bond A.

MANAGER shall maintain with COUNTY the sum of fifteen thousand dollars ($15,000), on file with the Treasurer of Sacramento COUNTY, as a security deposit/performance bond (deposit) for the faithful performance by MANAGER of the provisions of this Agreement. COUNTY is authorized to use the deposit, or any portion of it, to cure any default of MANAGER or to compensate COUNTY for any damage sustained by COUNTY resulting from MANAGER’s default.

B.

If a default occurs, MANAGER shall immediately on demand pay to COUNTY a sum equal to the portion of the security deposit expended or applied by COUNTY as provided in this section so as to maintain the deposit in the amount initially deposited with COUNTY at all times during the term of this Agreement, or any extension thereof.

C.

If there is neither default nor damage to the facility or property at the expiration or termination of the term of this Agreement, or any extension thereof, COUNTY shall return the security deposit to MANAGER.

D.

COUNTY’s obligation with respect to the deposit is that of a debtor and not a trustee. COUNTY shall maintain such deposit in an interest-bearing account and the interest earned thereon shall be the property of COUNTY and shall be used by COUNTY for management and promotion of the Golf Course facility. COUNTY shall not be required to pay MANAGER any interest on such security deposit.

E.

The provisions of this section are not deemed liquidated damages, and the deposit is not subject to the provisions of Civil Code Section 1950.7, since the primary purpose of this Agreement is not the rental of real property.

2.14 Permits and Licenses

MANAGER shall in accordance with approved Operating Budget obtain and maintain in full force and effect throughout the term of this Agreement any and all applicable permits and business licenses which may be required by any law, including administrative regulations and local ordinances, for the conduct of MANAGER’s operations hereunder. Within thirty (30) calendar days following execution of this Agreement, MANAGER shall furnish the Director with copies of all such permits and licenses.

2.15 Insurance A.

Without limiting MANAGER’s indemnification, MANAGER in accordance with approved Operating Budget shall procure and maintain for the duration of this Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the Agreement by MANAGER, its agents, representatives or employees. MANAGER shall maintain in force at all times during the term of this Agreement and any extensions or modifications thereto, insurance as specified in Exhibit I. It is the responsibility of MANAGER to notify its insurance advisor or insurance carrier(s) regarding coverage, limits, forms and other insurance requirements specified in Exhibit I.

It is understood and agreed that COUNTY shall not pay any sum to MANAGER under this Agreement unless and until COUNTY is satisfied that all insurance required by this agreement is in force at the time services hereunder are rendered. Failure to maintain insurance as required in this agreement may be grounds for material breach of contract. See insurance Exhibit I for details of coverages, limits, terms and conditions.

B.

MANAGER shall provide a fidelity bond in its insurance coverage to cover itself and all of its employees and representatives who will be expected to handle cash and/or checks, which are the property of COUNTY, and to protect COUNTY in the event of theft of such property. The amount of such fidelity bond shall be $10,000 as specified by COUNTY policy.

2.16 Remedies/Lack of Performance Should MANAGER fail, after ten (10) days' notice from COUNTY of the need thereof, to perform its obligations required hereunder, COUNTY may, but shall not be obligated to, in addition to all other available remedies, exercise its right to terminate this Agreement as provided hereinafter and enter upon the premises and perform MANAGER’s obligations under this Agreement, using any equipment or materials on the premises suitable for such purposes. MANAGER shall forthwith, on demand, reimburse COUNTY for its costs so incurred, including direct and indirect overhead costs as determined by the Director.

2.17 Early Termination of Agreement For Cause A.

COUNTY may terminate this Agreement prior to the expiration of the term hereof upon the happening of one or more of the following events:

1.

The failure of MANAGER to maintain in full force and affect all forms of insurance required hereunder.

2.

The failure of MANAGER to maintain in full force and affect any permit, license, or PGA Class A Golf Pro rating required hereunder.

3.

Any sale, transfer, or assignment by MANAGER of any right, license, privilege, or duty granted to or imposed upon it hereunder.

4.

A breach of service by MANAGER including, but not limited to, insufficient hours of operation or health or safety violations which cause or may cause the facility closure.

5.

Assignment by MANAGER of the revenue from this Agreement for the benefit of its creditors.

6.

Filing of a voluntary petition by MANAGER or becoming the subject of an involuntary petition in any proceedings in Bankruptcy Court.

7.

Abandonment of the premises by MANAGER.

8.

Except as otherwise provided in Subparagraphs (1) through (7) of this Section 2.17, the default of MANAGER in the performance of any promise, term, condition, or covenant required of it hereunder, provided MANAGER fails to cure such default within ten (10) calendar days following receipt of written notice of default from the Director. However, if the nature of such a default is such that it cannot reasonably be cured within such period, MANAGER shall be deemed to have cured such default, if, within such period MANAGER commences performance thereof and thereafter diligently prosecutes the same to completion.

9.

Any violation of or failure to comply with a term or provision of this agreement.

B.

Early termination by the COUNTY pursuant to this section shall be upon not less than ten (10) days advance written notice to MANAGER, which notice shall state the basis for such termination and the effective date thereof. Upon the effective date of such termination, COUNTY may take possession of the facility without further notice or demand to MANAGER. Failure to serve notice of termination upon the happening of any of the events described in this Section 2.17 shall waive COUNTY's right to thereafter declare such termination upon the subsequent happening of any such event.

C.

In the event COUNTY terminates this Agreement pursuant to this section and takes possession of the Golf Course and related facilities, COUNTY may operate the facilities in any manner it deems appropriate for the COUNTY's benefit and the public's best interests, without any liability.

2.18 COUNTY’s Right to Terminate Agreement Without Cause Notwithstanding any provision herein to the contrary, including the period of the term set forth in Section 2.03 of this Agreement, if the COUNTY determines that it is in the best interests of the COUNTY to terminate this Agreement, the COUNTY may, acting through the Director, terminate this Agreement without penalty or cause, in the COUNTY's sole discretion, upon ninety (90) days' written notice to MANAGER of intent to terminate this Agreement.

2.19 MANAGER's Non-Compliance; Right to Enter And Make Repairs; Use of Security Deposit/Performance Bond A.

If the COUNTY determines that there are deficiencies in MANAGER’s performance of the Golf Course operations and maintenance authorized and required herein, the COUNTY may provide, as specified in Sections 2.17 and 2.18 of this Agreement, a written notice of such deficiencies to MANAGER, requiring MANAGER to correct such deficiencies within the time specified in the written notice.

B.

In the event MANAGER fails to correct the deficiencies within the time prescribed by the written notice, the COUNTY may exercise its right of entry to cure such deficiencies; and/or use the security deposit/performance bond to cure the deficiencies.

C.

In the event that the COUNTY does exercise its option to enter the premises to cure any deficiencies in the operation of the Golf Course, and such action requires the closure of the facilities, both parties agree that it is impracticable or extremely difficult to fix the extent of actual damages resulting from the failure of the MANAGER to comply with the obligations for Golf Course operations and maintenance and premises herein required, authorized and specified. As a result of said impracticability, the parties hereto agree that a reasonable estimate of such damages is FIVE THOUSAND DOLLARS ($5,000) per day for each day that the Golf Course is closed, and that MANAGER shall be liable to the COUNTY for liquidated damages in such amount.

2.20 Subcontracts, Assignment A.

MANAGER shall obtain prior written approval from COUNTY before subcontracting any of the services delivered under this Agreement. MANAGER remains legally responsible for the performance of all contract terms including work performed by third parties under subcontracts. Any subcontracting will be subject to all applicable provisions of this Agreement. MANAGER shall be held responsible by COUNTY for the performance of any subcontractor whether approved by COUNTY or not.

B.

Except as hereinafter stated, MANAGER shall have no right, authority, or power whatsoever to sell, assign, or transfer any right, license, privilege, or duty granted to or imposed upon it hereunder. Such right, license, privilege, and duty are granted and imposed solely and personally to and upon MANAGER, and any such sale, assignment, or transfer shall result in immediate termination hereof.

2.21 Conflict Of Interest MANAGER represents that neither it nor any of its officers, partners or employees have a financial interest, as defined in Section 87103 of the Government Code, in the subject-matter of this Agreement, other than the right to receive payment from COUNTY for the services performed. No director or officer of MANAGER shall have any interest in any concession activities at the Golf Course or its related facilities or in any contract involving the Golf Course without prior approval by the Director. Operating expenses shall not include any profit increment to MANAGER or its associates. Profit to MANAGER, if any, is included within the Management Fees/Compensation to MANAGER specified in Section 2.08, of this Agreement.

2.22 Surrender of Premises Upon expiration or earlier termination of this Agreement, or at the end of any holding over period pursuant to Section 2.03(C) of this Agreement, MANAGER shall surrender the Golf Course premises and all appurtenances to COUNTY in a good state of repair, reasonable wear and tear accepted. MANAGER shall repair any damage to such Golf Course premises and appurtenances as necessary related to the surrender of the premises and the removal of any fixturization and equipment. MANAGER shall be responsible for any damage caused by any risk which MANAGER is required to insure against pursuant to Section 2.15 herein.

3.

GENERAL CONDITIONS

3.01 Authority of The Director The Director shall administer this Agreement on behalf of COUNTY. Unless otherwise provided herein, or required by applicable law, the Director shall be vested with all rights, powers, and duties of COUNTY hereunder. With respect to matters hereunder subject to the approval, satisfaction, or discretion of COUNTY or the Director, the decision of the Director in such matters shall be final.

3.02 Term Clarification In the event of any conflict in the definition or interpretation of any word, responsibility, service or schedule between this Agreement and the Exhibits attached hereto, said conflict or inconsistency shall be resolved by giving precedence in the following order: first to the Agreement; then to the Exhibits to the Agreement.

3.03 Consent Whenever the consent or approval of either COUNTY or MANAGER is required or authorized hereunder, such consent or approval shall not be unreasonably withheld, unreasonably conditioned, or unreasonably delayed.

3.04 Time of The Essence Time is of the essence in the performance of this Agreement.

3.05 Independent Contractor A.

It is understood and agreed that MANAGER (including MANAGER’s employees) is an independent contractor and that no relationship of employer-employee exists between the parties hereto. MANAGER’s assigned personnel shall not be entitled to any benefits payable to employees of COUNTY. As an independent contractor, MANAGER hereby indemnifies and holds COUNTY harmless from any and all claims that may be made against COUNTY based upon any contention by any third party that an employer-employee relationship exists by reason of this Agreement.

B.

It is further understood and agreed by the parties hereto that MANAGER in the performance of its obligation hereunder is subject to the control or direction of COUNTY as to the designation of tasks to be performed, the results to be accomplished by the services hereunder agreed to be rendered and performed, and not the means, methods, or sequence used by MANAGER for accomplishing the results.

C.

If, in the performance of this Agreement, any third persons are employed by MANAGER, such person shall be entirely and exclusively under the direction, supervision, and control of MANAGER. All terms of employment, including hours, wages, working conditions, discipline, hiring, and discharging, or any other terms of employment or requirements of law, shall be determined by MANAGER.

D.

It is further understood and agreed that as an independent contractor and not an employee of COUNTY, neither the MANAGER nor MANAGER’s assigned personnel…