Social and Political Commentary

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Reappointment of Mount Hood Golf Course manager grinds to its completion.

... No complications anticipated in Aldermen's approval at its December 3 meeting

by Joe Sullivan

Golf Management Corporation has operated Mount Hood Course since 2002. Management team (l to r) Kevin Arndt; golf pro Mike Farrell; and principals Phil and Tom Friel. GMC is anticipated to extend its tenure through 2017.

In an effort to avoid a delay in approving the golf course manager contract the City issued  a Request for Proposal dated May 2012. It was in anticipation of completing the process by August 27 or 28.

The intent was to avoid what happened in the last approval process when a late appointment of the golf manager in November resulted in the loss of business when people looking to schedule events in the upcoming year would not know who the golf course manager would be and consequently choose another venue.

That ambition fell away when the approval process ended up in a sequence of rejected bids and reissuing RFP’s that were ineffective in drawing bids from the hoped-for competing golf management companies. The process rolled on and on and it wasn’t until October 23 when the Park Commissioners approved the bid of Golf Course Management Compamy (GCM), the current manager, enabling the process to move forward.

Still to go was the review of the technical portion of the bid which provides for the evaluation of the manager’s capabilities to run the course, something for which GCM always receives high marks The review originally scheduled for Tuesday, October 30 had to be moved to Thursday November 1 because of the storm.

Hurricane Sandy compresses the approvals schedule.

On November 1 the Commissioners will review both the technical portions and financial portions of the bid. Ordinarily,these two reviews are held at separate meetings. With only one manager bidding the separation is not necessary. Sandy, nevertheless, forced the two meetings to be combined. The combination was necessary to keep the upcoming meetings on schedule.

The reason for the long delay in the selection process was simple. At least one golf course manager, GCM, wanted more money that the city RFP offered. The Commissioners were not only dealing with the reluctance of one golf course manager. The initial RFP made available in July drew six different contenders. Some of them were big ones. Billy Casper Golf and KemperSports each manage over 100 courses.

Each contender was supposed to evaluate the city’s proposal, make any changes he wanted, and submit it to the Park Commission as its official bid. On the deadline day that the bids were to be received only one company had submitted a bid, GCM, the incumbent manager of the golf course.

No contender accepts initial RFP offer.

None of the other candidates would accept the terms the city offered. GCM’s entry was disqualified because the changes it wanted did not fall within the parameters of the city’s RFP.

It was back to the beginning for the RFP process. GCM was already operating under the contract the city had issued five years earlier. In 2002 and 2007 GCM’s responding bid to the city’s RFPs resulted in contracts for GCM in both 2002 and 2007 when the city accepted both bids. A comparison of the earlier RFP's and the new one would be a good indicator of where the differences may be. Resolving these differences could lead to an agreement and the issuance of a new contract.

The differences seemed to lie in two areas, the amount the city was willing to give for the operation of the Snack Bar and the amount the city was willing to share with the golf manager for revenues over $1.2 million.

The most obvious difference lay in what the city wanted from Snack Bar sales. The 2007 RFP showed that the city wanted 10% of the snack bar sales. In competing for the contract in 2007 GCM’s bid increased the city’s take when GMC’s accepted bid offered the city an increase from 10% to 11% of Snack Bar sales.

A change came when the city’s 2012 RFP proposed to increase its share of Snack Bar sales to 15%. In its responding bid GMC was not willing to increase the city’s share to 15%. GMC wanted to hold the city to the 10% of sales that it wanted in its 2007 RFP .

A new RFP was issued to reflect the city’s adjustment from 15% to 10%. But that RFP produced no response either from GMC or any of the other hoped-for bidders. The difference settled on the share the city was willing to give to the golf course manager for revenues exceeding $1.2

In both the 2002 and 2007 the city’s RFPs offered 75% of golf revenue that exceed $1.2 million to the golf course manager. GCM, acting on the competitive nature of the 2002 bidding process, said it would be satisfied with 70% of these revenues. Five years later, in the 2007 bidding process, GCM took even less of the revenue over the $1.2 million when its bid said it would take only 65% of this revenue.

GCM’s failure to respond to yet another RFP which reduced the city’s Snack Bar sales take from 15% to 10% but maintained the sharing of revenue exceeding $1.2 at 65% for the golf course manager showed where the disconnect to an agreement was. For whatever it had accepted in the past, GCM was looking for the 75% share which had been offered in the 2002 and 2007 RFP’s.

GCM wanted improvement in both share of Snack Bar sales and golf revenues over $1.2 million.

A final RFP was issued which included the limitation of 10% of Snack Bar sales for the city and the expansion of the provision for sharing revenues over $1.2 million from 65% to 75% to the golf course manager.

Its important to note that these changes to the RFP’s weren’t limited to GCM but included any other manager who wanted to bid for the course management job.

This issue became manifest when Billy Casper Golf, one of the original contenders in July came back for a “walk through” of the course. This allows any contender the opportunity to walk the course as a means of evaluating whether it wants to respond to the city's RFP.

Billy Casper Golf did not respond to the new RFP but GCM did. The Park Commission's scheduled October 28 meeting was intended to review the technical portion of the bid in which the Commissioners evaluate the manager's qualifications to run the course. The meeting was knocked out by Hurricane Sandy. A meeting set for Thursday, November 1 at 10:30 was intended to review only the financial portion of the bid but with the Monday meeting canceled it became neccessary to review both the technical and financial portions at this meeting. Since only GCM had submitted a bid it was only their bid that was at issue. The Commission's review of the technical portion of GCM's bid had the manager receiving grades of "highly advantageous" in almost every category.

In the evaluation of the financial portion of the bid the Commission found that GCM's financial submission fulfilled the requirements stated in the RFP. The requirements  contained the changes that brought the city's share of Snack Bar sales down to 10% and increased the manager's share of revenues over $1.2 million to 75%. Before the Commissioners can issue a recommendation to approve GCM as the winner of the contract it must submit the financial portion of GCM's bid to Patrick Dello Russo, the City's CFO, for his review. Mr. Dello Russo had already reviewd and approved the technical portion of the bid. No problems are anticipated and the Commissioners are expecting to have the CFO's approval in time for their November 5 meeting when the Commissioners will recommend GCM as the golf course manager for the next five years starting in 2013.

The five-year contract still has to be approved by the Board of Aldermen. Hurricane Sandy has pushed the schedule for the preliminary meetings necessary before the Aldermen finally vote closer together. Now that the Commissioners were able to vote on GCM's bid on November 1 the  process will be back on scedule on November 5 when the Park Commission will vote to recommend that GCM be appointed golf course manager through 2017.   

The process, interrupted by Sandy, will be back on schedule November 5 when the Park Commission votes its recommended choice for manager. Unless some totally unexpected issue emerges at this meeting it is expected that the Commission will choose to recommend reappointment of the current manager, Golf Course Management Company. This recommendation will be presented to the Board of Aldermen on Monday November 19 with the Aldermen voting to approve at its meeting on December 3, 28 days before the current contract expires.

Park Commission used great care in implementing bidding process.  

It should be noted for however long the process takes it was very carefully executed by the Park Commission. Every contender got the same opportunity to respond to the city’s offers. Botched bidding processes can have very bad consequences. As a result of the 2002 process the city faced a legal action which the city settled out of court. The settlement cost the golf course $320,000.

Reappointment of GCM as golf course manager has some very solid benefits for the city. It has a manager that has been able to produce continuing high revenue in its management of the course. GCM continually produces annual revenues that exceed $2 million. Even in 2011, with a record 64 days of rain, the revenue exceeded $2 million.

This is quite an accomplishment on this hilly little course. The unrecognized talent of GCM is that its good work naturally engenders the appreciation of the golf course community that pays for the course’s operation. Try and find somebody in this paying golf community who has a bad word to say about the manager.   

November 2, 2012

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