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HomeMy WebLinkAbout09028RESOLUTION NO. 9028 A RESOLUTION APPROVING MANAGEMENT AGREEMENTS FOR WALKINGSTICK GOLF COURSE AND CITY PARK GOLF COURSE BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND ZAREMBA ENTERPRISES, INC., AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE THE SAME WHEREAS, the City desires to engage a qualified Manager to manage, operate, maintain, and promote the Walkingstick Golf Course and City Park Golf Course; and WHEREAS, Zaremba Enterprises, Inc. is qualified and capable of managing, promoting, maintaining, and operating the Walkingstick Golf Course and City Park Golf Course; and WHEREAS, the acceptance of the negotiated agreements for operation, maintenance, promotion, and management of the Walkingstick Golf Course and City Park Golf Course would be in the best interest of the City of Pueblo; BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The Walkingstick Golf Course Management Agreement dated June 12, 2000 and the City Park Golf Course Management Agreement dated June 12, 2000 between Pueblo, a Municipal Corporation and Zaremba Enterprises, Inc. relating to the operation, maintenance, promotion, and management of the Walkingstick Golf Course and the City Park Golf Course (excluding the restaurants and lounges), copies of which are attached hereto and incorporated herein, having been approved as to form by the City Attorney, are hereby approved. SECTION 2 The City Council does hereby exempt the Management Agreements from the requirements of Section 2 of Ordinance No. 5846, An Ordinance Establishing Criteria And Procedures For The Award of Management And Concession Contracts. S ECTiON 3 . The President of the City Council is authorized to execute and deliver the Management Agreements in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. ATTEST: City C k INTRODUCED: June 12, 2000 By Rich Golenda Councilperson AP DEL OVED: President of the City Council BACKGROUND PAPER TITLE: A RESOLUTION APPROVING '.MANAGEMENT AGREEMENTS FOR WALKINGSTICK GOLF COURSE AND CITY PARK GOLF COURSE BETWEEN PUEBLO, A MUNICIPAL CORPORATION AND ZAREMBA ENTERPRISES, INC., AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAME ISSUE: Should the City Council approve Management Agreements between the City and Zaremba Enterprises, Inc. for the management of City Park and Walkingstick Golf Courses to include all related facilities except for the restaurant /lounge operations at each course. BACKGROUND: The current golf course management agreements with Zaremba Enterprises, Inc. expire on December 31, 2000 for City Park and November 30, 2000 for Walkingstick. At the May 8, 2000 City Council Work Session, Mike Zaremba of Zaremba Enterprises, Inc. withdrew his proposals to operate the restaurant/lounge facilities at both municipal courses and instead requested that the Council only consider entering into management agreements with him for the maintenance and operation of each course and the related pro- shops. At that time, the City Council instructed Administration to proceed in drafting new agreements with Mr. Zaremba which would exclude the restaurant /lounge facilities at both golf courses. The restaurant /lounge operations at each course would be advertised for requests for proposals at a later date. The initial term of both new agreements is for five (5) years and ends November 30, 2005. If one agreement terminates or is not renewed, they both terminate. If not terminated they will be automatically renewed for successive one year terms unless notice of non - renewal is given 30 days prior to the end of each term. FINANCIAL IMPACT: Walkingstick Golf Course: Zaremba Enterprises, Inc. will be paid an annual management fee of $45,000 and ten (10) percent of the gross revenue collected for driving range charges and golf cart rentals provided that this amount shall not annually be greater than ninety -five (95) percent of the management fee. This was approximately $29,794 in 1999. City Park Golf Course: Zaremba Enterprises, Inc. will be paid an annual management fee of $45,000 and ten (10) percent of the gross revenue collected for driving range charges and golf cart rentals provided that this amount shall not annually be greater than ninety -five (95) percent of the management fee. This was approximately $28,340 in 1999. The compensation payable to Zaremba Enterprise, Inc. under each of the proposed management agreements is the same as the current Walkingstick and City Park agreements. Zaremba Enterprises, Inc. will be responsible for all expenses incurred in the operation of each respective pro shop operation. RECOMMENDATION: Approval of the Resolution. CITY OF PUEBLO CITY PARK GOLF COURSE MANAGEMENT AGREEMENT THIS MANAGEMENT AGREEMENT entered into as of June 12, 2000, by and between the City of Pueblo, Colorado, a Municipal Corporation, 1 City Hall Place, Pueblo, Colorado, 81003, hereinafter referred to as die "City", and Zaremba Enterprises, Inc., a Colorado Corporation. 705 W. El Portal, Pueblo West, Colorado, 81007, hereinafter referred to as the "Manager ". WITNESSETH: WHEREAS, the City now owns and operates a municipal golf course which is open to public play and located on the premises commonly known as "City Park Municipal Golf Course ", 3900 Thatcher Avenue, Pueblo, Colorado, and WHEREAS, the City desires to engage a qualified manager to manage, operate, maintain and promote the golf course, and WHEREAS, Manager is qualified and capable of managing, promoting, maintaining and operating the golf course; NOW, THEREFORE, in consideration of the foregoing and the mutual promises herein contained, the City and Manager agree as follows: As used herein, the following words and phrases shall have the following meaning: (a) "Golf Course" means and includes the property owned by City comprising the City Park Municipal Golf Course and all the facilities located thereon including, without limitation, the starter buildings, pro shop, driving range and golf cart storage building but excluding the Clubhouse other than the pro shop. For purposes hereof, the term "pro shop" means the approximately 32 feet by 33 feet (1,056 square feet) floor area located on the east side of the Clubhouse together with the approximately 21 feet by 27 feet (567 square feet) storage room located in the basement of the Clubhouse.. (b) "Director" means the City's Director of Parks and Recreation. 2. (a) City hereby appoints and retains Manager, subject to and upon the terms and conditions herein set forth, as an independent contractor to operate, manage, maintain and promote the Golf Course for a term of five (5) years from December 1, 2000 to November 30, 2005, unless sooner terminated as herein provided. If this Agreement has not been sooner terminated, and so long as Manager is not in default hereunder, the term of this Agreement shall be automatically renewed for successive one (1) year terms upon the same covenants and conditions, unless either City or Manager gives written notice of non - renewal to the other party at least thirty (30) days prior to the end of the initial five (5) year term, or any renewal term, whichever the case may be. Upon timely giving of the notice of non - renewal, this Agreement shall terminate at the end of the initial five (5) year term, or any renewal term, whichever the case may be. (b) Manager and City have simultaneously entered into two separate Management Agreements, one for the Walkingstick Municipal Golf Course, and the other for the Citv Park Municipal Golf Course in order that both golf courses be operated by the same person to provide efficient, similar and reliable services to the public. It is expressly agreed and intended by the City and Manager that if any one of the Management Agreements is terminated or not renewed for any reason whatsoever, with or without cause, the other Management Agreement shall automatically terminate. Therefore, if the Management Agreement for the Walkingstick Municipal Golf Course is terminated or not renewed, this Management Agreement for City Park Municipal Golf Course shall automatically terminate without notice on the date of termination or non - renewal of the Walkingstick Municipal Golf Course Management Agreement. (c) All financial obligations of the City under this Agreement in any calendar year, including without limitation the financial obligations contained in paragraphs 4 and 5 hereof, are contingent upon funds for that purpose being budgeted and appropriated by the City Council of City on or before December 31 of the prior calendar year. Failure to budget and appropriate such funds by December 31 for any subsequent calendar year shall constitute an event of non - appropriation. In the event of non - appropriation, City or Manager may terminate this Agreement upon thirty (30) days prior written notice given to the other party. (d) City reserves the right to fix and establish all fees and charges for the use of the Golf Course and all activities conducted thereon. 3. Manager accepts said appointment and agrees to operate, manage, maintain and promote the Golf Course and perform the following services during the effective period of this Agreement: (a) Supervise and be responsible for all aspects of the operation, maintenance, management and promotion of the Golf Course and all activities thereon, including the maintenance and upkeep of the Golf Course in at least the same or better condition than presently existing. (b) Develop and implement efficient maintenance programs for the Golf Course including (i) custodial and interior maintenance of the buildings, and (ii) greens, tees, aprons, traps and hazards, fairway, lakes, roughs and driving range including watering, chemical and fertilizer, mowing, seeding, reconditioning and reseeding, moving of green cups and tee markers, airifying and topdressing, and weed control and elimination programs. Manager shall on or before December 1 of each year submit such programs to the Director for review and approval. (c) Develop and implement efficient management programs for the operation, scheduling of and use of the Golf Course and the provision of services to the public including the presence of Manager's personnel, golf course superintendent, and golf professional at the Golf Course. Manager shall on or before December 1 of each year submit such programs to the Director for review and approval. (d) Hire, supervise and schedule all employees needed and required for the efficient operation, maintenance, management and promotion of the Golf Course, including without limitation, (i) a golf professional who possesses a P.G.A. Class "A" Certificate experienced in the management and operation of golf course facilities, and (ii) a qualified golf course superintendent and greens- keeper experienced in maintenance, upkeep and care of golf courses familiar with the soil and climatic conditions of the area. The golf professional and golf course superintendent shall be acceptable to City (Manager shall confer with and obtain the City Manager's approval prior to their employment, discharge or replacement) and shall be employed by Manager on a full -time basis during the effective period of this Agreement. It is expressly understood and agreed that all employees hired by Manager shall be the employees of Manager and no contractual obligations or relationship of employer- employee shall exist between the City and such employees. Manager shall provide all workers' compensation insurance for its employees in accordance with the provisions of the laws of the State of Colorado and furnish Director satisfactory proof that such insurance is in effect. (e) Use its best efforts to effect operation and cost control and savings. (f) Be responsible for the security and inventory of, and maintain in good condition and repair, all City's equipment, fixtures and machinery used by Manager or placed under Manager's custody and control by City. An initial inventory of such machinery, fixtures, and equipment shall be prepared and signed by Director and Manager and attached hereto. Director and Manager shall annually update such inventory. (g) Monitor all activities on the Golf Course to insure compliance with all resolutions or ordinances of City governing the rules of play, regulating the use of the Golf Course and facilities therein, and imposing fees and charges for use of or activities on the Golf Course. (h) Keep and maintain accurate and complete accounts and records of all activities and transactions conducted by Manager on the Golf Course in accordance with generally accepted accounting principles, which accounts and records shall be available for inspection, copy and audit by City during normal business hours. Manager shall retain all such accounts and records for a minimum period of three (3) years after termination of this Agreement. (i) Submit to Director during August of each year a proposed Golf Course budget for the next calendar year. Manager understands and agrees that the Golf Course budget will not include reimbursement for any cost or expense incurred by Manager in (1) the employment of golf professionals, (ii) the performance of management services, and (iii) the performance of the services and furnishing the items described in subparagraphs (h) and (r) of this paragraph 3, and that such costs and expenses shall be the sole responsibility of Manager. Manager further understands and agrees that the Golf Course budget will contain only such items of reimbursement as the City Council in its sole discretion may determine. 0) Keep the Golf Course and all facilities therein in a clean, sanitary, safe and orderly condition. (k) Be responsible for scheduling the use of the Golf Course and all activities thereon, including without limitation, scheduling and reserving tee times for golf play and the planning, scheduling and overseeing of golf tournaments. (1) Comply strictly with all applicable federal, state and City laws, rules and regulations. (m) Keep the Golf Course including the pro shop and driving range, open for business at such hours and times as the Director and Manager shall from time to time determine subject to the approval of the City Manager. (n) Furnish prompt, courteous and efficient service adequate to meet all reasonable demands and needs of the public, ensuring polite and inoffensive conduct and demeanor on the part of its representatives, agents and employees. (o) Make no expenditure or commitment of funds not within the approved budget or in any line item of the approved budget in excess of the amount budgeted therefor. Submit to the City's Department of Finance at least monthly invoices and verified requests for reimbursement for costs incurred in the operation of the Golf Course including periodic verified request showing Manager's payroll, including wages and benefits, for its employees (excluding golf professionals), during the period covered by such request. The City's Department of Finance will review the verified requests and invoices and if in compliance with the approved budget and this Agreement make reimbursement therefor provided that any reimbursement for Manager's payroll will be made directly to Manager who shall be solely responsible for paying its employees and withholding and paying all state and federal payroll obligations and taxes. Manager shall hold harmless and indemnify City from any such payroll obligations and taxes and shall at least monthly account to the City and submit proof of non - delinquency thereof. (p) Meet with the Director at least monthly to review the operation and maintenance of the Golf Course and the Golf Course budget and expenditures. Manager shall be directly responsible to the Director in all matters concerning the operation, maintenance, promotion and management of the Golf Course. (q) Surrender and deliver to City, at the termination of this Agreement, (i) all remaining operating supplies, fertilizer and materials the purchase of which was reimbursed by City, (ii) the Golf Course, and (iii) golf carts and City's equipment in good working order and condition, reasonable wear and tear excluded. -4- (r) Maintain in force at Manager's sole cost during the effective period of this Agreement commercial liability insurance, including personal and bodily injury, blanket contractual, products liability, non -owned and hired automobile coverage, covering all activities conducted by Manager under this Agreement, in the minimum amount of $1,000,000 aggregate, per occurrence for personal and bodily injury and $500,000 aggregate, per occurrence for property damage. Certificates evidencing such insurance coverage and workers' compensation insurance shall be tiled with the Director on or before December 1, 2000 and said certificates shall certify that such insurance coverage is in force and will not be cancelled or reduced without at least thirty (30) days prior written notice to City and that the City is named as an additional insured under the policies of liability insurance. At least ten (10) days prior to the expiration of any such insurance, a certificate showing such insurance has been renewed or extended shall be filed with the Director. (s) Maintain in safe operating condition and repair equipment and golf carts furnished and made available by City to Manager. Manager shall provide each renter of a golf cart with the rules and regulations established by City for the operation of golf carts at the Golf Course and shall be responsible for the enforcement of such rules and regulations. (t) Operate and manage the Golf Course as a public facility for the use and benefit of the public on a fair, equal and nondiscriminatory basis without preferential treatment to any individual, group or entity including without limitation, adjacent or nearby homeowners or businesses, any school or school district, or the University of Southern Colorado, or any person or group associated therewith. Manager shall comply fully with state and federal antidiscrimination laws, rules and regulations and specifically agrees that no person shall be denied or refused services or other full or equal use of the Golf Course, nor denied employment opportunities by Manager as a result of race, creed, color, sex, age, national origin, ancestry or disability unrelated to ability or job performance. (u) Coordinate the operation and management of the Golf Course in a cooperative manner with the operator of the Golf Course restaurant and lounge, including, but not limited to, allowing the operator of the restaurant and lounge reasonable access to and use of (i) the starter building for the sale of restaurant food and beverages, and (ii) the Golf Course for the restaurant food and beverage cart. Any dispute between the Manager and the operator of the Golf Course restaurant and lounge shall be resolved by the Director. (v) Pay at Manager's sole cost, before the same become delinquent, all sales, use and property taxes on Manager's property and business conducted on the Golf Course. Manager shall collect and remit to the City all sales taxes on the sale or rental of Manager's merchandise and stock - in- trade. (w) Obtain at Manager's expense all licenses required for the Manager's operations, activities and business conducted on the Golf Course. (x) Carry, furnish, provide and replace as needed, at Manager's sole cost and risk, -5- sufficient and adequate stock -in- trade, merchandise, furnishings and furniture in the pro shop as determined by the Manager and Director to meet the reasonable needs and demands of the public. Manager shall not sell golf clubs or other golf related merchandise at or from any other location within Pueblo County, Colorado (except Walkingstick Golf Course and Pueblo West Golf Course) during the effective period of this Agreement. (y) Comply with the rules and regulations adopted by the Director relating to the use of the Golf Course parking lot. 4. City, subject to availability of sufficient budgeted and appropriated funds therefor, shall: (a) furnish and make available for the Golf Course equipment and machinery which is necessary in the City's sole judgment for the operation and maintenance of the Golf Course. (b) reimburse Manager for costs incurred in accordance with approved budgets and this Agreement for the operation and maintenance of the Golf Course. City shall not be responsible for the salary or benefits of golf professionals employed by Manager, nor for any personal or private debts of Manager or any expenditure in excess of or not authorized by the approved budgets and Manager shall indemnify and hold harmless City therefrom. (c) repair and maintain the parking lot and the interior and exterior of the buildings located on the Golf Course (except the interior of the pro shop, restaurant and lounge) including roofs, walls and foundations, and, except for minor and routine repairs, repair and maintain the heating, plumbing and electrical systems in the pro shop, restaurant and lounge. (d) provide City employees to act as starters who shall be located at such locations on the Golf Course as the Manager and Director shall mutually determine. The starters shall require and verify that each person using the Golf Course (excluding the pro shop, restaurant and lounge) has paid the appropriate fee and charge therefor. The starters shall be under the supervision of the Director of Finance of the City who shall establish written procedures for such verification. All fees and charges for the use of or activities on the Golf Course (excluding pro shop, restaurant and lounge) shall be collected by and paid to the Manager who shall hold such fees and charges in trust, nevertheless, for the use and benefit of the City. The Manager shall at least weekly remit and deliver all such fees and charges paid to or collected by the Manager and receipts therefor to the City. (e) annually submit to City Council of City a budget for the operation and maintenance of the Golf Course containing such items of reimbursement as the City Council in its sole discretion may determine. Neither the 2001 budget for the Golf Course nor any subsequently adopted budget shall be binding upon the City for any year except for the year adopted. City may adjust budgets based upon prior actual and anticipated revenues and expenses and to protect the City from unreasonable or excessive operation and maintenance costs. In consideration of the services to be rendered and performed by Manager hereunder, City Ir"I shall pay to Manager (i) an annual management tee of $45,000.00 commencing December 1, 2000, payable in twelve equal monthly installments, and (ii) an amount equal to ten (10) percent of the gross revenue collected for driving range charges and motorized cart rentals, provided such amount shall not annually be greater than ninety -five (95) percent of the annual management fee payable under (i) above. All payments to Manager hereunder shall be paid monthly in arrears. The management fee payable to Manager under (i) above shall be increased on December 1, 2001 and each December 1 thereafter by the percentage increase in the Consumer Price Index (1982 -84 =100, U.S. City Average, All Items) during the prior 12 -month period. 6. Manager shall fully indemnify and hold harmless, protect and defend at its sole cost and expense, the City, its officers, agents and employees from and against any and all risks, suits, damages, expenses, penalties or claims (including costs and reasonable attorney fees) which City, its officers, agents or employees may incur or become liable as a result of the injury or death of any person or persons, or the loss or damage of any property, or the violation of any law or regulation arising out of or in connection with the operation of the Golf Course or the performance of this Agreement by Manager or any of its officers, agents or employees or any other person acting on behalf of Manager. 7. Time is of the essence hereof and to each and every provision of this Agreement. If in the judgment of City Manager of City the manner of maintenance or operation of the Golf Course or the quality or quantity of service does not meet the requirements of this Agreement, or if Manager breaches or is in default of any term or condition of this Agreement, City may give Manager written notice specifying with reasonable particularity the unsatisfactory performance or default. If Manager fails or refuses to remedy such unsatisfactory performance or default within thirty (30) days after receipt of such notice, City may terminate this Agreement. If City institutes any litigation to enforce its rights or remedies under this Agreement, Manager agrees to pay all costs of enforcement including reasonable attorney fees. 8. Manager shall not use or allow the Golf Course or any facility thereon to be used for any improper, unlawful, immoral or objectionable purpose and shall not cause, maintain or permit any disorderly conduct, nuisance or waste in, on or about the Golf Course. Manager shall not conduct any activity or sell anything at or on the Golf Course except as specifically authorized in this Agreement. 9. Manager shall not make any improvements of a permanent nature to the Golf Course or install any sign on the Golf Course or make any additions, changes, remodeling or alterations to any building on the Golf Course without the Director's prior written approval and obtaining all permits required therefor. All such approved improvements, signs, additions, changes, remodeling or alternations shall remain the property of the City. 10. It is understood and acknowledged by the parties that the relationship of Manager to City is that of an independent contractor and that Manager shall have no authority to employ any person as employee or agent for or on behalf of City for any purpose. Manager shall have no authority, -7- expressed or implied, to bind the City to any agreement, liability or understanding. Manager shall pay when due all required withholding and other employment taxes and income tax on any monies paid pursuant to this Agreement. 11. If the consent or approval of the Director, City Manager or City is required under this Agreement for any purpose, such consent or approval will not be unreasonably withheld. Any approval or consent required by the City shall be by Resolution adopted by the City Council of City. 12. In the event a dispute arises between Manager and the Director with respect to any provision of this Agreement or the obligations or performance of either the City or Manager hereunder, the Director or Manager may submit such dispute to the City Manager for resolution and determination. If such dispute is submitted to the City Manager for resolution, his decision thereon shall be binding upon all parties. 13. This Agreement sets forth all understandings and agreements between City and Manager. No change, modification or amendment shall be valid and binding unless set forth in writing, approved by the City, and signed by City and Manager. No verbal agreement or understanding with any officer, employee or agent of the City, either before or after execution of this Agreement, shall affect, modify or change any of the terms or provisions of this Agreement. 14. This Agreement shall not be assigned in whole or in part, nor shall the Golf Course or any part thereof be sublet, nor shall any right or privilege herein granted to Manager be sold, transferred or assigned without the prior written approval of the City. Any such sale, transfer, subletting or assignment, whether voluntary or involuntary, without the prior written approval of City shall be void and constitute grounds for immediate termination of this Agreement at the option of the City. 15. City reserves the right to enter upon the Golf Course and all facilities thereon at any time for any reason. 16. The waiver by City of any breach of any term or provision of this Agreement shall not be deemed to be a waiver of such term or provision for any subsequent breach of the same or any other term or provision. 17. Any notice required under this Agreement shall be in writing and personally delivered or sent by United States certified mail, postage prepaid, to: (a) if to the City: City Manager, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, 81003; (b) If to the Manager, 705 W. El Portal, Pueblo West, Colorado, 81007; or to such other place as City or Manager may from time to time designate in a written notice to the -8- other party. 18. If any provision of this Agreement is declared invalid or unenforceable by a court of competent jurisdiction, the unaffected provisions hereof shall remain in full force and effect. 19. This Agreement shall be governed by the laws of the State of Colorado and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and approved assigns. 20. The City Park Golf Course Management Agreement dated October 13, 1993 between City and Manager as successor to Woodside Golf, Inc. is terminated effective December 1, 2000 and City and Manager are released from all future obligations thereunder. 21. Notwithstanding any provision of this Agreement to the contrary, no term or provision of this Agreement shall be construed or interpreted as a waiver, expressed or implied, of any of the immunities, benefits, rights, protections, or any other provisions of the Colorado Governmental Immunity Act, section 24 -10 -101 et seq. C.R.S., or any other law granting immunity to the City and its officers and employees. 22. If this Agreement is terminated for any reason or is not renewed, City will purchase from Manager all golf related merchandise with the City Park Golf Course logo imprinted thereon which was purchased and paid for by Manager with its own funds. The purchase price shall not exceed Manager's actual cost thereof based upon invoices and shall be mutually agreed upon by City and Manager. Executed the day and year first above written. CITY OF PUEBLO, A CIPAL CORD RATION Byh M President of the City Council ZAREMBA ENTERPRISES, INC. By c President Attest: 1 -- City C k A _. Attest: �1�-- Secretary -9- QUARANTY In consideration of the City of Pueblo, a Municipal Corporation approving and executing the foregoing Management Agreement, the undersigned Michael Zaremba does hereby personally guarantee the performance of the Management Agreement by Zaremba Enterprises, Inc. In the event of the default of Zaremba Enterprises, Inc. under any provision of the Management Agreement and written notice thereof is given to Michael Zaremba, Michael Zaremba will timely cure such default and perform all the covenants and provisions of the Management Agreement to be performance by Zaremba Enterprises, Inc. thereunder. Signed the day of ;, JJ . 2000. Michael Zarem a -10- CITY OF PUEBLO WALKINGSTICK GOLF COURSE MANAGEMENT AGREEMENT THIS MANAGEMENT AGREEMENT entered into as of June 12, 2000, by and between the City of Pueblo, Colorado, a Municipal Corporation, 1 City Hall Place, Pueblo, Colorado, 81003, hereinafter referred to as the "City", and Zaremba Enterprises, Inc., a Colorado Corporation, 705 W. El Portal, Pueblo West, Colorado, 81007, hereinafter referred to as the "Manager ". WITNESSETH: WHEREAS, the City now owns and operates a municipal golf course which is open to public play and located on the premises commonly known as "Walkingstick Municipal Golf Course ", X1301 Walkingstick Boulevard, Pueblo, Colorado, and WHEREAS, the City desires to engage a qualified manager to manage, operate, maintain and promote the golf course, and WHEREAS, Manager is qualified and capable of managing, promoting, maintaining and operating the golf course; NOW, THEREFORE, in consideration of the foregoing and the mutual promises herein contained, the City and Manager agree as follows: 1. As used herein, the following words and phrases shall have the following meaning: (a) "Golf Course" means and includes the property owned or leased by City comprising the Walkingstick Municipal Golf Course and the following facilities located thereon: clubhouse, starter buildings, and maintenance building, but excluding the restaurant, lounge, public restrooms, and front entranceway located on the first floor of the Golf Course clubhouse consisting of approximately 2,532 square feet of floor area and the gazebo located outside but adjacent to the clubhouse. (b) "Director" means the City's Director of Parks and Recreation. 2. (a) City hereby appoints and retains Manager, subject to and upon the terms and conditions herein set forth, as an independent contractor to operate, manage, maintain and promote the Golf Course for a term of five (5) years from December 1, 2000 to November 30, 2005, unless sooner terminated as herein provided. If this Agreement has not been sooner terminated, and so long as Manager is not in default hereunder, the term of this Agreement shall be automatically renewed for successive one (1) year terms upon the same covenants and conditions, unless either City or Manager gives written notice of non - renewal to the other party at least thirty (30) days prior to the end of the initial five (5) year term, or any renewal term, whichever the case may be. Upon timely giving of the notice of non - renewal, this Agreement shall terminate at the end of the initial five (5) year term, or any renewal term, whichever the case may be. (b) City may, without cause and without penalty, terminate this Agreement at the end of the third year of the five (5) year term of this Agreement, i.e., on November 30, 2003, upon 120 days prior written notice given to Manager. (c) Manager and City have simultaneously entered into two separate Management Agreements, one for the Walkingstick Municipal Golf Course, and the other for the City Park Municipal Golf Course in order that both golf courses be operated by the same person to provide efficient, similar and reliable services to the public. It is expressly agreed and intended by the City and Manager that if any one of the Management Agreements is terminated or not renewed for any reason whatsoever, with or without cause, the other Management Agreement shall automatically terminate. Therefore, if the Management Agreement for the City Park Municipal Golf Course is terminated or not renewed, this Management Agreement for Walkingstick Municipal Golf Course shall automatically terminate without notice on the date of termination or non - renewal of the City Park Municipal Golf Course Management Agreement. (d) All financial obligations of the City under this Agreement in any calendar year, including without limitation the financial obligations contained in paragraphs 4 and 5 hereof, are contingent upon funds for that purpose being budgeted and appropriated by the City Council of City on or before December 31 of the prior calendar year. Failure to budget and appropriate such funds by December 31 for any subsequent calendar year shall constitute an event of non - appropriation. In the event of non - appropriation, City or Manager may terminate this Agreement upon thirty (30) days prior written notice given to the other parry. (e) City reserves the right to fix and establish all fees and charges for the use of the Golf Course and all activities conducted thereon. 3. Manager accepts said appointment and agrees to operate, manage, maintain and promote the Golf Course and perform the following services during the effective period of this Agreement: (a) Supervise and be responsible for all aspects of the operation, maintenance, management and promotion of the Golf Course and all activities thereon, including the maintenance and upkeep of the Golf Course in at least the same or better condition than presently existing. (b) Develop and implement efficient maintenance programs for the Golf Course including (i) custodial and interior maintenance of the buildings, and (ii) greens, tees, aprons, traps and hazards, fairway, lakes, roughs and driving range including watering, chemical and fertilizer, mowing, seeding, reconditioning and reseeding, moving of green cups and tee markers, airifying and topdressing, and weed control and elimination programs. Manager shall on or before December 1 of each year submit such programs to the Director for review and approval. -2- (c) Develop and implement efficient management programs for the operation, scheduling of and use of the Golf Course and the provision of services to the public including the presence of Manager's personnel, golf course superintendent, and golf professional at the Golf Course. Manager shall on or before December 1 of each year submit such programs to the Director for review and approval. (d) Hire, supervise and schedule all employees needed and required for the efficient operation, maintenance, management and promotion of the Golf Course, including without limitation, (i) a golf professional who possesses a P.G.A. Class "A" Certificate experienced in the management and operation of golf course facilities, and (ii) a qualified golf course superintendent and greens- keeper experienced in maintenance, upkeep and care of golf courses familiar with the soil and climatic conditions of the area. The golf professional and golf course superintendent shall be acceptable to City (Manager shall confer with and obtain the City Manager's approval prior to their employment, discharge or replacement) and shall be employed by Manager on a full -time basis during the effective period of this Agreement. It is expressly understood and agreed that all employees hired by Manager shall be the employees of Manager and no contractual obligations or relationship of employer - employee shall exist between the City and such employees. Manager shall provide all workers' compensation insurance for its employees in accordance with the provisions of the laws of the State of Colorado and furnish Director satisfactory proof that such insurance is in effect. (e) Use its best efforts to effect operation and cost control and savings. (f) Be responsible for the security and inventory of, and maintain in good condition and repair, all City's equipment, fixtures and machinery used by Manager or placed under Manager's custody and control by City. An initial inventory of such machinery, fixtures, and equipment shall be prepared and signed by Director and Manager and attached hereto. Director and Manager shall annually update such inventory. (g) Monitor all activities on the Golf Course to insure compliance with all resolutions or ordinances of City governing the rules of play, regulating the use of the Golf Course and facilities therein, and imposing fees and charges for use of or activities on the Golf Course. (h) Keep and maintain accurate and complete accounts and records of all activities and transactions conducted by Manager on the Golf Course in accordance with generally accepted accounting principles, which accounts and records shall be available for inspection, copy and audit by City during normal business hours. Manager shall retain all such accounts and records for a minimum period of three (3) years after termination of this Agreement. (i) Submit to Director during August of each year a proposed Golf Course budget for the next calendar year. Manager understands and agrees that the Golf Course budget will not include reimbursement for any cost or expense incurred by Manager in (i) the employment of golf professionals, (ii) the performance of management services, and (iii) the performance of the services -3- and furnishing the items described in subparagraphs (h) and (r) of this paragraph 3, and that such costs and expenses shall be the sole responsibility of Manager. Manager further understands and agrees that the Golf Course budget will contain only such items of reimbursement as the City Council in its sole discretion may determine. 0) Keep the Golf Course and all facilities therein in a clean, sanitary, safe and orderly condition. (k) Be responsible for scheduling the use of the Golf Course and all activities thereon, including without limitation, scheduling and reserving tee times for golf play and the planning, scheduling and overseeing of golf tournaments. (1) Comply strictly with all applicable federal, state and City laws, rules and regulations. (m) Keep the Golf Course including the pro -shop and driving range, open for business at such hours and times as the Director and Manager shall from time to time determine subject to the approval of the City Manager. (n) Furnish prompt, courteous and efficient service adequate to meet all reasonable demands and needs of the public, ensuring polite and inoffensive conduct and demeanor on the part of its representatives, agents and employees. (o) Make no expenditure or commitment of funds not within the approved budget or in any line item of the approved budget in excess of the amount budgeted therefor. Submit to the City's Department of Finance at least monthly invoices and verified requests for reimbursement for costs incurred in the operation of the Golf Course including periodic verified request showing Manager's payroll, including wages and benefits, for its employees (excluding golf professionals), during the period covered by such request. The City's Department of Finance will review the verified requests and invoices and if in compliance with the approved budget and this Agreement make reimbursement therefor provided that any reimbursement for Manager's payroll will be made directly to Manager who shall be solely responsible for paying its employees and withholding and paying all state and federal payroll obligations and taxes. Manager shall hold harmless and indemnify City from any such payroll obligations and taxes and shall at least monthly account to the City and submit proof of non - delinquency thereof. (p) Meet with the Director at least monthly to review the operation and maintenance of the Golf Course and the Golf Course budget and expenditures. Manager shall be directly responsible to the Director in all matters concerning the operation, maintenance, promotion and management of the Golf Course. (q) Surrender and deliver to City, at the termination of this Agreement, (i) all remaining operating supplies, fertilizer and materials the purchase of which was reimbursed by City, (ii) the In Golf Course, and (iii) golf carts and City's equipment in good working order and condition, reasonable wear and tear excluded. (r) Maintain in force at Manager's sole cost during the effective period of this Agreement commercial liability insurance, including personal and bodily injury, blanket contractual, products liability, non -owned and hired automobile coverage, covering all activities conducted by Manager under this Agreement, in the minimum amount of $1,000,000 aggregate, per occurrence for personal and bodily injury and $500,000 aggregate, per occurrence for property damage. Certificates evidencing such insurance coverage and workers' compensation insurance shall be tiled with the Director on or before December 1, 2000 and said certificates shall certify that such insurance coverage is in force and will not be cancelled or reduced without at least thirty (30) days prior written notice to City and that the City is named as an additional insured under the policies of liability insurance. At least ten (10) days prior to the expiration of any such insurance, a certificate showing such insurance has been renewed or extended shall be filed with the Director. (s) Maintain in safe operating condition and repair equipment and golf carts furnished and made available by City to Manager. Manager shall provide each renter of a golf cart with the rules and regulations established by City for the operation of golf carts at the Golf Course and shall be responsible for the enforcement of such rules and regulations. (t) Operate and manage the Golf Course as a public facility for the use and benefit of the public on a fair, equal and nondiscriminatory basis without preferential treatment to any individual, group or entity including without limitation, adjacent or nearby homeowners or businesses, any school or school district, or the University of Southern Colorado, or any person or group associated therewith. Manager shall comply fully with state and federal antidiscrimination laws, rules and regulations and specifically agrees that no person shall be denied or refused services or other full or equal use of the Golf Course, nor denied employment opportunities by Manager as a result of race, creed, color, sex, age, national origin, ancestry or disability unrelated to ability or job performance. (u) Coordinate the operation and management of the Golf Course in a cooperative manner with the operator of the Golf Course restaurant and lounge, including, but not limited to, allowing the operator of the restaurant and lounge reasonable access to and use of (i) the walk -in refrigerated room located in the basement of the Golf Course clubhouse, (ii) the starter buildings for the sale of restaurant food and beverages, (iii) the gazebo for the sale of restaurant food and beverages, and (iv) the Golf Course for the restaurant food and beverage cart. Any dispute between the Manager and the operator of the Golf Course restaurant and lounge shall be resolved by the Director. (v) Pay at Manager's sole cost, before the same become delinquent, all sales, use and property taxes on Manager's property and business conducted on the Golf Course. Manager shall collect and remit to the City all sales taxes on the sale or rental of Manager's merchandise and stock - in- trade. -5- (w) Obtain at Manager's expense all licenses required for the Manager's operations, activities and business conducted on the Golf Course. (x) Carry, furnish, provide and replace as needed, at Manager's sole cost and risk, sufficient and adequate stock -in- trade, merchandise, furnishings and furniture in the pro -shop as determined by the Nlanager and Director to meet the reasonable needs and demands of the public. Manager shall not sell golf clubs or other golf related merchandise at or from any other location within Pueblo County, Colorado (except City Park Golf Course and Pueblo West Golf Course) during the effective period of this Agreement. (y) Comply with the rules and regulations adopted by the Director relating to the use of the Golf Course parking lot. 4. City, subject to availability of sufficient budgeted and appropriated funds therefor, shall: (a) furnish and make available for the Golf Course equipment and machinery which is necessary in the City's sole judgment for the operation and maintenance of the Golf Course. (b) reimburse Manager for costs incurred in accordance with approved budgets and this Agreement for the operation and maintenance of the Golf Course. City shall not be responsible for the salary or benefits of golf professionals employed by Manager, nor for any personal or private debts of Manager or any expenditure in excess of or not authorized by the approved budgets and Manager shall indemnify and hold harmless City therefrom. (c) repair and maintain the parking lot, maintenance building, and the interior and exterior of other buildings located on the Golf Course (except the interior of the pro -shop, restaurant and lounge) including roofs, walls and foundations, and, except for minor and routine repairs, repair and maintain the heating, plumbing and electrical systems in the pro -shop, restaurant and lounge. (d) provide City employees to act as starters who shall be located at such locations on the Golf Course as the Manager and Director shall mutually determine. The starters shall require and verify that each person using the Golf Course (excluding the pro shop, restaurant and lounge) has paid the appropriate fee and charge therefor. The starters shall be under the supervision of the Director of Finance of the City who shall establish written procedures for such verification. All fees and charges for the use of or activities on the Golf Course (excluding pro shop, restaurant and lounge) shall be collected by and paid to the Manager who shall hold such fees and charges in trust, nevertheless, for the use and benefit of the City. The Manager shall at least weekly remit and deliver all such fees and charges paid to or collected by the Manager and receipts therefor to the City. (e) annually submit to City Council of City a budget for the operation and maintenance of the Golf Course containing such items of reimbursement as the City Council in its sole discretion may determine. Neither the 2001 budget for the Golf Course nor any subsequently adopted budget shall be binding upon the City for any year except for the year adopted. City may adjust budgets in based upon prior actual and anticipated revenues and expenses and to protect the Citv from unreasonable or excessive operation and maintenance costs. 5. In consideration of the services to be rendered and performed by Manager hereunder. City shall pay to Manager (i) an annual management fee of $45,000.00 commencing December 1, 2000. payable in twelve equal monthly installments, and (ii) an amount equal to ten (10) percent of the gross revenue collected for driving range charges and motorized cart rentals, provided such amount shall not annually be greater than ninety -five (95) percent of the annual management fee payable under (i) above. All payments to Manager hereunder shall be paid monthly in arrears. The management fee payable to Manager under (i) above shall be increased on December 1, 2001 and each December 1 thereafter by the percentage increase in the Consumer Price Index (1982 -84 =100, U.S. City Average, All Items) during the prior 12 -month period. 6. Manager shall fully indemnify and hold harmless, protect and defend at its sole cost and expense, the City, its officers, agents and employees from and against any and all risks, suits, damages, expenses, penalties or claims (including costs and reasonable attorney fees) which City, its officers, agents or employees may incur or become liable as a result of the injury or death of any person or persons, or the loss or damage of any property, or the violation of any law or regulation arising out of or in connection with the operation of the Golf Course or the performance of this Agreement by Manager or any of its officers, agents or employees or any other person acting on behalf of Manager. 7. Time is of the essence hereof and to each and every provision of this Agreement. If in the judgment of City Manager of City the manner of maintenance or operation of the Golf Course or the quality or quantity of service does not meet the requirements of this Agreement, or if Manager breaches or is in default of any term or condition of this Agreement, City may give Manager written notice specifying with reasonable particularity the unsatisfactory performance or default. If Manager fails or refuses to remedy such unsatisfactory performance or default within thirty (3 0) days after receipt of such notice, City may terminate this Agreement. If City institutes any litigation to enforce its rights or remedies under this Agreement, Manager agrees to pay all costs of enforcement including reasonable attorney fees. 8. Manager shall not use or allow the Golf Course or any facility thereon to be used for any improper, unlawful, immoral or objectionable purpose and shall not cause, maintain or permit any disorderly conduct, nuisance or waste in, on or about the Golf Course. Manager shall not conduct any activity or sell anything at or on the Golf Course except as specifically authorized in this A 9. Manager shall not make any improvements of a permanent nature to the Golf Course or install anv sign on the Golf Course or make any additions, changes, remodeling or alterations to any building on the Golf Course without the Director's prior written approval and obtaining all permits required therefor. All such approved improvements, signs, additions, changes, remodeling or alternations shall remain the property of the City. -7- 10. It is understood and acknowledged by the parties that the relationship of Manager to City is that of an independent contractor and that Manager shall have no authority to employ any person as employee or agent for or on behalf of City for any purpose. Manager shall have no authority, expressed or implied, to bind the City to any agreement, liability or understanding. Manager shall pay when due all required withholding and other employment taxes and income tax on any monies paid pursuant to this Agreement. 11. If the consent or approval of the Director, City Manager or City is required under this Agreement for any purpose, such consent or approval will not be unreasonably withheld. Any approval or consent required by the City shall be by Resolution adopted by the City Council of City. 12. In the event a dispute arises between Manager and the Director with respect to any provision of this Agreement or the obligations or performance of either the City or Manager hereunder, the Director or Manager may submit such dispute to the City Manager for resolution and determination. If such dispute is submitted to the City Manager for resolution, his decision thereon shall be binding upon all parties. 13. This Agreement sets forth all understandings and agreements between City and Manager. No change, modification or amendment shall be valid and binding unless set forth in writing, approved by the City, and signed by City and Manager. No verbal agreement or understanding with any officer, employee or agent of the City, either before or after execution of this Agreement, shall affect, modify or change any of the terms or provisions of this Agreement. 14. This Agreement shall not be assigned in whole or in part, nor shall the Golf Course or any part thereof be sublet, nor shall any right or privilege herein granted to Manager be sold, transferred or assigned without the prior written approval of the City. Any such sale, transfer, subletting or assignment, whether voluntary or involuntary, without the prior written approval of City shall be void and constitute grounds for immediate termination of this Agreement at the option of the City. 15. City reserves the right to enter upon the Golf Course and all facilities thereon at any time for any reason. 16. The waiver by City of any breach of any term or provision of this Agreement shall not be deemed to be a waiver of such term or provision for any subsequent breach of the same or any other term or provision. 17. Any notice required under this Agreement shall be in writing and personally delivered or sent by United States certified mail, postage prepaid, to: (a) if to the City: City Manager, City of Pueblo, 1 City Hall Place, Pueblo, Colorado, 81003; (b) If to the Manager, 705 W. E1 Portal, Pueblo West, Colorado, 81007, or to such other place as City or Manager may from time to time designate in a written notice to the other party. 18. If any provision of this Agreement is declared invalid or unenforceable by a court of competent jurisdiction, the unaffected provisions hereof shall remain in full force and effect. 19. This Agreement shall be governed by the laws of the State of Colorado and shall be binding upon and inure to the benefit of the parties hereto and their respective successors and approved assigns. 20. The Walkingstick Golf Course Management Agreement dated November 13, 1995 between City and Manager is terminated effective December 1, 2000 and City and Manager are released from all future obligations thereunder. 21. Notwithstanding any provision of this Agreement to the contrary, no term or provision of this Agreement shall be construed or interpreted as a waiver, expressed or implied, of any of the immunities, benefits, rights, protections, or any other provisions of the Colorado Governmental Immunity Act, section 24 -10 -101 et seq. C.R.S., or any other law granting immunity to the City and its officers and employees. 22. If this Agreement is terminated for any reason or is not renewed, City will purchase from Manager all golf related merchandise with the Walkingstick Golf Course logo imprinted thereon which was purchased and paid for by Manager with its own funds. The purchase price shall not exceed Manager's actual cost thereof based upon invoices and shall be mutually agreed upon by City and Manager. Executed the day and year first above written. CITY OF PUEBLO, A M IPAL CO RATION By President of the City Council ZAREMBA ENTERPRISES, INC. By President Attest: City C k Attest. tip l' - " t✓,Y�t. Imo-. -- Se etary ' u GUARANTY In consideration of the City of Pueblo, a Municipal Corporation approving and executing the foregoing Management Agreement, the undersigned Michael Zaremba does hereby personally guarantee the performance of the Management Agreement by Zaremba Enterprises, Inc. In the event of the default of Zaremba Enterprises, Inc. under any provision of the Management Agreement and written notice thereof is given to Michael Zaremba, Michael Zaremba will timely cure such default and perform all the covenants and provisions of the Management Agreement to be performance by Zaremba Enterprises, Inc. thereunder. Signed the day of �1��✓1; , 2000. . ��... Michael Zaremba -10-