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HomeMy WebLinkAbout4653 Contract Number 4653 Vendor SCOTT ALEXANDER'S GOLF SHOP INC Sub�ect Golf Management Department Parks File Class LEG 12-1 Begin Date 1/1/2007 End Date 3/31/2011 Review Date 4/15/2011 Vault Date Comments Amendment 12/09 Amendment 1/11/2011 AMENDMENTTO _ GOLFMANAGEMENT AGREEMENT WHEREAS, on September 13, 2007, the C�ty of Bremerton, a mumc�pal corporahon of the State of Washmgton, "City" and Scott Alexander's Golf Shop, Inc, a Washmgton corporat�on, "Contractor" entered mto an Agreement to prov�de professional golf management and serv�ces at the C�ty of Bremerton Gold Mountam Golf Club w�th a termmatwn date of December 30, 2009, and WHEREAS, on December 29, 2009 C�ty of Bremerton, a mumcipal corporation of the State of Washmgton, "C�ty" and Scott Alexander's Golf Shop, Iuc , a Washmgton corporat�on, "Contractor" entered mto an Amendment to the agreement extendmg the tertn of the agreement through December 31, 2010, and WHEREAS, the part�es des�re to amend the Agreement to extend the tertn through March 31, 201 l, NOW THEREFORE, for mutual cons�deration, C�ty and Contractor agree as follows Sect�on 3 of the Agreement is hereby amended to extend the tertnmat�on date of the Golf Management Agreement to March 31, 201 1 All other terms of the Agreement not specifically amended herem shall remam m full force and effect CITY OF BREMERTON SCOTT ALEXANDER'S GOLF SHOP, INC � �� , ayor y SCOTT QLEXANDER Its � I �l I I\ DATE I /I � l�Dl I DA E T By ARYL MA Y Its DATE II �-1 I � � ATTEST � Carol Et en, C�ty CI rk APPROVED AS TO FORM RO ER LUBOVICH, City Attorney R\Legal\Legal\Fdes\Curtent Acirve Fdes\Gold o f Management A@reement Amendment (2010) doc Amendmenf lo GoljManagemen! Agreemenf , � n�rm�rrr To GOLF MANAGEA�NT AGREEMENT WHEREF►S, on September 13, 2007, tha City of Bremerton, a m�cipal corporauoa of the State of Waslungton, "Crty�' and Scott Alezsnder'e Golf S6op, Inc., a Washmgton corporaqon, °Coatractoi" enterod mto and Agrament to pronde professional golf management and sernces at the City of Bremerton Gold Moantam Golf Club, and WHEREAS, the term of the Golf Management Agreement commeaced on January 1, 2007 and ahall tecaunate on December 31, 2009, and WHEREAS, the parhea des�re to amend the Agreement to extend the term through Dxember 31, 2010, NOW THEREFORE, for mutual cons�derat�on, City and Contractor agree ae follows Section 3 of the Agrcement is hereby amended to extend the termmat�on date of the Golf Management Agreement to December 31, 2010 All other tetms of the Agreement not spectfically amended herem shell remam m fui� fome and effect CITY OF BREMERTON SCOTT ALEXANDER'3 GOLF SHOP, INC � y ,�;a- c�� Mayor By SCOTT ALEXANDER Its DATE DATE By DARYL MA Its DATE I � Z Q A ST arol Etg Ciry Clerk APPROVED AS TO FORM RO LUBOVICH, Cny Attomey R U.egalLLegql�Fda�CUrtmt Acbv Id Mountam�Goff Menaganeot Agiennrnt Amrndmpil (2009) doc � AmenAmenr ro ColjManagement Agreement � i� � _ .� COPY F�R ; � � , YOUR INFORNiATION t •w� �.:.." � GOLF MANAGEMENT AGREEMENT THIS AGREEMENT' made and entered mto on the date fully executed by and between the CITY OF BREMERTON, a mumc�pal corporarion of the State of Washington, heremafter referred to as "City," and SCOTT ALEXANDER'S GOLF SHOP, INC , a Washmgton Corporat�on, heremafter referred to as "Contractor;' to prov�de professional golf management and serv�ces pursuant to this Agreement, at the C�ty of Bremerton Gold Mountam Golf Club WHEREAS, the City �s the owner of Gold Mountam Golf Club, w}uch ownersh�p mcludes the land upon wkvch sazd golf complex is located, the buildmgs and other improvements wluch are a part thereof, and WHEREAS, the Gold Mountaui Golf Club consists of two 18 hole golf courses, the Olympic and the Cascade course, ("Golf Courses" or "Courses"), a dnvmg range, and the clubhouse contamuig a Pro Shop, restaurant, meehng rooms and the Olympic room, ("Clubhouse") and other related facihhes and structures, collecrively also referred to herem as ("Golf Club") _ — WHEREAS, the City previously entered mto an agreement with Scott Alexander and Daryl Matheny, Contractor's pnncipals ("Pnncipals"), for food, beverage, and golf management and related services at the Gold Mounta�n Golf Club, mcludmg, but not limrted to, food and beverage service, management of the Cascade and Olymp�c golf courses and dnvmg range, and for providmg P G A professional golf services and lessons to the facil�ty, and WHEREAS, the agreement beriveen the City and Contractor for these services expired December 31, 2006 wlvch has twtce been extended by amendments to sazd agreement pendmg negohat�on of a new agreement, and WHEREAS, the extensions were executed with the understandmg that new terms may be negotiated for a new agreement begmrung wrth the yeaz 2007, and WHEREAS, the City desires to enter mto a new agreement wrth Contractor for management of the Cascade and Olympic golf courses, Clubhouse, dnvuig range and Pro Shop, and for providmg professional golf services and lessons to the facility entrtled "Golf "Management AgreemenY' e£fectrve January 1, 2007 and superseding the terms of the extended agreement, and WHEREAS, the parhes hereto have s�multaneously executed a sepazate agreement enhtled "Food and Beverage AgreemenY' relatmg to the food and beverage service at the Gold Mountam Golf Club, and WHEREAS, the parhes hereto have also simultaneously executed a document entitled "Lease AgreemenY' relating to the lease to the Contractor of a certam portion of the Gold Go[f Management Agreement Page 1 of 20 Mountam Golf Club (the "Lease") for operat�on of a Pro Shop, dnvmg range and Contractor's pnvate cart rental busmess It �s the mtent of this Agreement to have the Contractor prov�de management servtces to the Gold Mountam Golf Club tn accordance wtth the terms and conditions of this Agreement, and WHEREAS, it is the mtent of this Agreement that the Contractor operate the facil�hes covered herein m such a manner as to generate and provide revenue at or above a level suffic�ent to meet bond payment obligations and operatmg expenses paid by the City for the Gold Mountam Golf Club NOW, THEREFORE, m considerahon of the mutual covenants contamed herem, the parties agree as follows SECTION 1 PURPOSE AND ADIVIINISTRATION A The purpose of tlus Agreement is to estabhsh a management services agreement whereby contractor w�ll provide certaxn management and related sernces at City-owned golf facilit�es Tlvs Agreement is not a lease, nor does it create a leasehold mterest other than similar property mterest m Contractor to the C�ty's facilihes B Contractor will be respons�ble for performmg all work and/or sernces descnbed hereu� The Contractor's performance will be momtored and rev�ewed by the City of Bremerton Director of Pazks and Recreat�on, or his or her designee, (heremafter "Duector") Contractor shall report duectly to the D�rector and work closely with the Greens Supenntendent Reports and data requued to be provided by the Contractor shall be dehvered to the Duector Queshons of the Contractor regazdmg mterpretahon of the terms, provisions and requu�ements of ttus Agreement shall be addressed to the Director for response SECTION 2 PREMISES The facihhes of the Golf Club to be managed by the Contractor pursuant to tlus agreement mclude the Golf Courses, the Clubhouse and related facihries, heremafter ("Premises") SECTION 3 TERM Pursuant to IRS Revenue Procedure 97-13, the term of ttus Agreement shall be three (3) yeazs commencmg on January 1, 2007 (the "Commencement Date'� and shall termmate on December 31, 2009, unless termmated eazher m accordance with Sechon 14 SECTION 4 SCOPE OF SERVICES A General Serv�ces The Contractor's responstbilihes mclude promohng and managmg the use of the Golf Courses, the collechon of fees, staffing the courses, includmg starter services and marshals, management of the Clubhouse and azeas of Contractor's responsibility at the dnvmg range, except as otherwise agreed upon between the part�es m wntmg GolfMmragement Agreement Page 2 of 20 B Spec�fic Serv�ces In providmg the general services descnbed above, Contractor shall provide not less than the followmg spec�fic services 1 Olymp�c and Cascade courses. a Contractor shall provide an adequate number of starters, agreed upon by both parties, deemed necessary for the courses to fac�litate a good golf operat�on Contractor shall be responstble for all startmg of golf play and £or control of the first tee at all times Dunng peak play hmes for each season as idenhfied herem, Contractor must provide a course mazshal a mmimum of 346 hours per week for the months of May through September, 148 hours per week for the months of Mazch, Apnl and November, and seven hours per week for the months of November and December On days when the tee sheet is not full, Contractor may ad�ust this muumum downwazd to the extent start hmes aze not matenally affected In case of extended penods of mclement weather, this requirement can be wa�ved by mutual agreement of the Director of Pazks and Recreahon and Contractor In such case, the compensahon will be ad�usted accordingly upon mutual agreement b All counter staff at the courses shall be expenenced, tramed, and knowledgeable of golf operations and course rules c Contractor shall provide an adequate number, as agreed upon by both parties, of golf clubs, bags, and pull-carts for rent to users at the courses d Contractor shall operate and mamtam a sernce for the handluig, sales, and leasmg of golf equipment and for leasuig of carts for operahon of the Golf Club operarions e In cooperahon w�th the Director and Golf Complex Boazd of Directors, established pursuant to Chapter 2 34 of the Bremerton Murucipal Code (the "Golf Complex Boazd"), Contractor shall schedule all golf toumaments and shall �mhate and promote golf achvihes at the Golf Club f The Contractor and Greens Supenntendent shall mutually agree upon the open and start of play daily with the Duector resolvmg any conflicts 2 Drrvmg Range and Pro Shop a The Contractor agrees to mazntam and operate the dnvmg range and Pro Shop m con�unction with the services provided m tlus agreement The dnvmg range and Pro shop shall be mamtamed and operated m accordance with the Lease between the Crty and Contractor for the facilihes 3 Lessons a The Contractor may provide competent golf inshucrion to all groups and levels of public players, mcludmg �umors Qual�fied P G A members or registered ass�stants must be available to conduct lessons All revenues received and costs mcurred by Contractor for lessons shall be revenue and costs of the Contractor b All lesson gross revenue shall be paid d�rectly to the Contractor or subcontractor and shall not be mcluded m the City's revenue rece�pts 4 Gdt Cert�ficates Contractor will sell g�ft cert�ficates for merchandise, restaurant, green fees, and lessons Sale of these cerhficates w�ll be m accordance w�th mtemal Galf Management Agreement Page 3 of 20 controls as approved by the City Contractor sha(1 ma�ntam a log showmg all unredeemed outstandmg certificates 5 Clubhouse Management a The Contractor shall manage the Clubhouse for the City Th�s shall include operatmg and mamtammg the restaurant and lounge �n accordance with the Food and Beverage Agreement between the City and Contractor b Contractor shall mamtam the fac�lihes m a clean, neat and hygiemc condihon Contractor shall prov�de basic �amtonal services, mcluding suppl�es necessary to provide adequate�amtonal services These serv�ces shall mclude, but not be limited to � Cleanmg all carpets annually, u Vacuummg floors at least dazly dunng peak season, ui Cleazung restrooms and all common azeas at least daily, �v Providmg penodic spot checks o£ restrooms to replemsh supphes and paper products and attend to problems as needed, and v Clean wmdows and clean patios, sidewalks and other common azeas as needed c The Contractor shall mamtam the Clubhouse, and extenor pahos, uicludmg gazbage conta�ners azound Clubhouse bu�ldings and enhyways, m a clean, well kept, orderly manner to the satisfachon of the City Contractor shall conduct mmor mamtenance and repairs to mtenor facilit�es and fixtures, mcluduig l�ghts, plumbmg, and locks associated w�th� Contractor's area of responsibility d The Contractor shall provide ma�ntenance and repau� services for all FF&E wrtkun the Clubhouse, Conh�actor owned tools and eqmpment, and all Contractor leased equipment Replacement of City owned equipment shall be m the sole discrehon of the City and the City shall arrange for eqwpment replacement w accordance with avazlable fundu�g e Contractor shall be responsible for the costs of supphes for operahons at ds cost and expense 6 Advertismg a The Contractor shall annually provide to the Duector for approval an adverhsmg and promotion plan for the Golf Club, wluch approval shall not be unreasonably withheld Contractor shall spend a m�mmum of $35,000 per year for advemsmg for the Golf Club operahons b Contractor shall obtam City approval for all adverhsement for � commercial vendors unrelated to concession operahon on score cazds, benches, entryways, etc Contractor agrees to honor contracts with existmg advert�smg vendors unhl said contracts expue 7 Attend Meetmgs Contractor agrees to be available to attend regulaz and special meehngs of the Golf Complex Boazd, Pazks and Recreahon Commisston and City Council, and shall be prepazed to discuss issues and ideas of mterest to the Contractor and City C Pr�cmg of Golf Serv�ces 1 Green fees aze established by City Council followmg a review and recommendation of the Golf Complex Boazd The C�ty reserves the nght to establ�sh fees for res�dents, residenhal preferenhal programs, and events sponsored by local busmesses and orgamzations, as well as non-res�dent fees Fee ad�ustments must be approved by the City GolfMm�agement Agreement Page 4 of 20 Council except that the D�rector may establ�sh dtscount rates for promot�onal purposes Contractor, as an ex-officio member of the Golf Complex Boazd, shall have �nput on pncmg of golf serv�ces 2 All toumament fees will be set by the Contractor sub�ect to rev�ew and final approval of the Director SECTION 5 OTHER DUTIES AND RESPONSIBILITIES A Performance of Dut�es The Contractor shall devote their attention and energies to the performance of duties as golf Contractor for the C�ty dunng the term of tlus Agreement They shall conduct themselves at all times and m all matters m accordance with the standards accepted for golf Contractor as established by the Professional Golfers Associahon (heremafter "PGA") The Contractor shall operate the facihties and programs under their duechon and control so that they will meet or exceed the standazd m the mdustry for pubhc golf courses in the Puget Sound region B Personnel The Contractor shall prov�de competent personnel necessary for such operahons and shall traui and supervise them m the�r work and shall pay them for theu services at the Contractor's sole cost and expense Contractor shall supervise, d�rect and tram staff to perform duhes and meet requuements for sales, rentals and services wtuch aze, m the opmion of the City and Contractor, necessary Contractor shall provide an on-gomg staff traimng program w�th emphas�s on customer trazrung There wtll be a mmimum of two PGA professionals on staff mcludmg the Pnnc�pals of Contractor At least one of the PGA professionals must be on site dazly dunng peak business hours of the Golf Club _ C Credit Rahng Contractor shall maurtaui a good credit rahng m all commercial transactions so as not to discredrt the reputahon or name of the Crty of Bremerton D Tournament Play The Contractor shall have the nght and aze expected to represent the Crty of Bremerton m vanous golf toumaments They shall submrt their tournament schedule for informahon to the Director In the event they qualify, they shall have the nght to play ui the U S Open, Masters, the PGA National Championslvp, and the Club Contractor's Championslvp, or any tour event held locally E Secur►ty The City has mstalled a momtored burglaz alarm system at the Clubhouse and Pro Shop, and the City w�ll pay the monthly sernce chazge for the system Contractor is responsible for settmg the alazm, msunng that it is properly operatmg and notifymg the Crty if rt�s m need of repau F Inspect�ons The Contractor will make a daily physical mspection of the complex and report any unusual or unsafe condihons observed dunng sa�d inspection to the D�rector immed�ately Such reports shall be followed up m wntmg Golf Management Agreement Page 5 of 20 G Quarterly Rev�ew Contractor and City shall meet on a quarterly schedule, or as otherw�se as mutually agreed, to evaluate operations at the Golf Club and the performance of the parties pursuant to this agreement and to make mutually agreeable changes SECTION 6 OPERATING POLICIES AND PROCEDURES The Contractor will A Operate the Golf Club pursuant to the rules and regulahons established by the Crty Council and the Director B Expel unruly persons or those under the mfluence of mtoxicants from the Prem�ses under Contractor's control C Not foster nor permit any illegal activity on the Premises under Contractor's control D Answer and handle all complamts and shall superv�se a publ�c relations program In deahng with the pubhc, Contractor will not speak towazd City pohcies or decisions m a derogatory manner Contractor shall explazn and support city pohcies to staff and the golfing pubhc E Not use the Premises for ancillary, revenue-producmg achvihes, or social actavihes unless expressly authonzed by the City The parhes aclmowledge that Contractor conducts certam pnvate busmess operahons pursuant to the Lease executed with the City for operahon of a Pro Shop, dnvmg range and Contractor's pnvate cart rental business and further that Contractor subcontracts lessons at the Golf Club F Regulate the play and conduct of all persons on the golf course, mcludmg keepmg off trespassers and prevenhng m�ury to the golf course by players and others G Not allow any person to be afforded free use of the golf course unless approved by the Director H Supernse all golf achvihes m connechon w�th outside parhes and shall provide members of the golfing pubhc wrth adequate serv�ces, as may be required I Provide service to meet public demand and shall keep the Clubhouse open each day that the golf courses aze open for play, and at other reasonable hours as prescnbed by the City, except Thanksgivmg and Chnstmas, at Conh�actors opt�on, days the Greens Supenntendent closes the course due to mclement weather and except as set forth m Sechon 7(D) and (E) SECTION 7 COMPENSATION A Contractor shall be compensated for services as follows 1 Course and Facd�ty Management Fee Colf Managen:ent Agreement Page 6 of 20 a F�xed Fee - Year 2007 Contractor shall be paid the annual sum of three hundred fifty-five thousand etght hundred fifty do[lars ($355,850) Thts fixed fee compensat�on shall be pa�d m weekly mstallments of $6,843 27 or as otherwise agreed b F�xed Fee - Years 2008 and 2009 Contractor shall be paid the annual sum of three hundred eeghty-five thousand etgl:t hundred fifty dollars ($385,850) Th�s fixed fee compensat�on shall be pa�d m weekly mstallments of $7,420 19 or as otherwise agreed c Percentage (Greens) Fee In addit�on, throughout the term of this contract, Contractor shall be pa�d ten percent (10%) of revenues received from greens fees, net of sales tax, m excess of $2,000,000 00 but m no event shall th�s percentage fee exceed the fixed fee m any given yeaz set forth m tivs sect�on For purposes of th�s subsechon, greens fees mclude da�ly prtvate cart fees and all other course achvities not othenvise provided for m this section, Section 7, for wkuch revenue is received for use of the course, whether golf related or not T}us percentage fee shall be pa�d after the end of each yeaz 2 Golf Rounds For each year of tlus agreement, Contractor shall be paid addihonal compensarion for customer paid golf rounds that aze sold above the pnor yeaz's golf round sales as follows Rounds Compensat�on 1000-1500 $3,000 00 1501-2000 $5,000 00 2001-2500 $7,500 00 2501-3000 $15,000 00 3001 and above $18,000 00 For purposes of determmmg compensahon for golf rounds for the first yeaz of tlus agreement, �t �s aclmowledged that the pnor year's (2006) golf rounds were 90,509 Payment of this compensation will be made at the end of the year 3 Final reconc�Lat�on Final reconc�liahon and payment for each year will be made by January 31 of the followmg yeaz B BilLng and Payment Procedures The City shall pay the amounts due to Contractor as set forth m Sechon 7(A) Appropnate reconciliation payments for the costs and expenses mcurred by the City (i e cred�t card fees) m the current month for which the Contractor is obhgated to pay under the terms of the agreement, shall be mcluded in the reconcihahon ad�ushnents and will be deducted from the City's payment m the followmg month C Withholdmg of Payments to Contractor In the event the Contractor is 60 days or later m payment of lease payments associated with the Lease, City may withhold and apply all momes due to Contractor from C�ty under tkus Agreement to offset any such amounts due to C�ty from Contractor under said Lease D Golf Course Closure — For Cond�t�ons and Repair The golf course facil�ries shall remam open for play unless they aze closed as a result of causes beyond the control, fault, or negl�gence of the parhes Such causes may mclude, wrthout l�m�tation, acts of God or publ�c Golf Management Agreenient Page 7 of 20 enemy, acts of the federal, state, or local governments, fires, floods, epidemics, volcanic eruptions, quazantme restnctions, stnkes, fre�ght embazgoes, court orders, and unusually severe weather or other condit�on that causes all or a portion of the Golf Club facil�t�es to be closed for extended penods of time Should either the Ctty or the Contractor fa�l to perform because of a cause descnbed m this subsection, the C�ty and the Contractor shall make a mutually acceptable rev�sion m the SCOPE OF SERVICES and COMPENSATION provided for m th�s Agreement, including termmahon of the Agreement if the Golf Club is deemed unusable by the C�ty as a result of ma�or damage or destruction and the City elects not to rebu�ld the same In the event that City determmes that ►t �s necessary to close all or a pomon of the golf Club fac�lit�es due to regulaz mamtenance, repa�r, caprtal improvements, mclement weather, or similar condihon wluch results m a s�tuat�on where the golf course is unsahsfactory for play, or if damage to the course and factl�hes is lilcely if it remazned open, the City shall coordmate such closmg with the Contractor pnor to actual closmg Contractor shall comply with the Duector's dec�sion to close all or part of the course and facil�hes at no cost to the City In the event of closure of all or a portion of the Golf Club facilrt�es as set forth m tlus subsechon, Contractor shall not be enhtled to any compensahon pursuant to this sechon, Section 7, whether fixed fee or percentage fee, however, when feasible, the City and Contractor shall revise the SCOPE OF SERVICES and COMPENSATION as noted above for partial closwe of the Golf Club, unless ttus agreement �s temunated pursuant to Section 14(F) The C�ty shall mcur no habihty to Contractor for lost revenue or other addihonal compensahon as a result of any closure of all or a portion of the golf Club facihhes as set forth m th�s subsect�on E Golf Course Closure — For Events In the event cucumstances requue the closure of the course or portions thereof for events that may result m the loss of greens fees, the Director may approve, m advance of the closure and m wnhng, an amount represenhng potenhal greens fees lost as a consequence of the course closure Tlvs amount shall be used to determme what amount, �f any, shall be paid to the Contractor pursuant to tivs sechon Any amount pursuant to ttus sect�on will be mcluded u� the Fu►al reconcil�ahon and payment as provided m tlus sechon SECTION 8 CITY RESPONSIBILITIES A. Golf Course grounds 1 The City shall mamta►n and repas all turf and landscaped areas ad�acent to the tees, greens, fairways, dnvmg range, pazkmg lot and the Golf Course bu�ldmgs 2 The City shall mamtam and repair all buildmg extenors, pazkmg lots, pathways and all of their fixed components, u�clud►ng structural mamtenance of buildmgs, heahng and cool�ng umts, doors and wmdows, locks associated wrth City's area of responsib�lity, and lighhng systems 3 The services provided m(1) and (2) above shall be m the manner and to the extent previously prov�ded and w�thin defined annual budgets Golf Management Agree�nent Page 8 of 20 B Ut►lrties Ap electnc power, water, sewer, gas/propane, street utilrty, garbage and telephone service related to th�s agreement shall be pa�d by the C�ty If upon rev�ew the City determmes that action is needed to address excessrve consumphon, Contractor will promptly respond and take appropnate action to remedy the excessive consumphon Each party shall pay � mternet and web page costs and expenses related to their duries and responsibilities under th�s Agreement, unless otherwise agreed SECTION 9 CAPITAL IMPROVEMENTS AND FIXTURES Contractor shall not make any alterations, additions or �mprovements m the Gold Mountam Golf Club, mcludmg the Clubhouse, w�thout first obtammg the consent of Crty m wntmg, which consent can be wrthheld at C�ty's sole discretion All alterations, add�t�ons and tmprovements, shall be at the sole cost and expense of Contractor, and shall remam m and be sunendered with the Clubhouse as a part thereof at the ternunahon of tivs Agreement except for those unprovements and fixtures supplied by the Contractor wkuch at the hme of this Agreement aze idenhfied on the attached Exh�b�t A If Contractor performs work w�th the consent of City, as provided above, Contractor agrees to comply with all laws, ordu�ances, rules and regulahons of the City and any other authonzed public authonty Contractor further agrees that workmanslup will be of a reasonable commercial quality, m color schemes m accordance wrth current buildmg, standazds, and free of inechamcs liens Contractor further agrees to save City free and harmless from damage, loss or expense ansing out of such work SECTION 10 COLLECTION OF FEES, FINANCIAL REPORTING, AUDITING AND TAXES Pursuant to the Golf Club Revenue Bond resoluhons, the Crty irrevocably pledged gross revenues from the Golf Club as secunty for bond repayment Therefore, all gross revenues from any source shall first be deposrted m the City's bank account and disbutsed pursuant to th�s Agreement A Pomt of Sale System City shall be responsible for purchasmg, settmg up and maintauung a pomt of sale system through which all transacUons at the Golf Club will be� processed 1 C►ty's Respons�b�Lhes The City shall provide a castuenng system for use by the Contractor City shall prov�de uut�al trauvng on the operahons of the casluenng system All subsequent traimng of Contractor's staff shall be the responsib�lity of the Contractor The City shall also be respons�ble for mamtenance of network, w�nng, software, and eqwpment The C�ty will provide repa�r parts as needed for eqmpment 2 Contractor's Responsibd�t►es Contractor shall be responsible for any additional hazdware, user l�censes, and software that Contractor chooses to mstall The Contractor shall also be responsible for operatmg supplies such as rece�pt paper, toner, and labels Contractor shall provide addihonal formal trazmng for Contractor's employees after imtial trammg sessions have been performed by the C�ty New cashier employees and office managers must have su�table knowledge of the Golf cashienng system m order to perform their duhes m an efficient and accurate manner Th�s hammg may be prov�ded by Contractor personnel Galf Management Agreeme�rt Page 9 of 20 3 Modifications Any other changes, additions, or modificahons applicable to the City owned cashienng system would need mutual agreement as to payment respons�bility B Rece�ptmg Contractor and/or subcontractor shall collect for, and on behalf of, the City all gross revenue, includmg but not I�mited to golf course greens fees, dnvmg range fees collected under the Lease, golf club and cart rentals, golf course toumament fees, non-sufficient fund check retum fees, and all other fees at the Golf Club m stnct accordance with the schedule of fees establ�shed by the City, unless other mstructions aze given in wnhng to the Contractor Nettmg of transachons is prolubited All revenue collected from transactions under this agreement, with the excephon of lessons, must be processed through the Pomt of Sale System and deposited as provided �n subsection 10(C) Contractor may process lesson revenue through the Pomt of Sale System m which case the revenue must be receipted and deposited as provided m subsect�on 10(C) and thereafter reconc�led and pazd to Contractor as appropnate All course gross revenue must be recorded, collected and deposited m a manner wluch will d�spense a dated receipt to be given to each customer C Depos�ts All deposrts must be prepared in a tunely manner defined as %2 hour ahead of scheduled pick-up and composrtion of deposit shall remazn tntact and a clear audtt trazl mazntazned The Ctty will provide and pay for couner service Any delays causuig addmonal "premise charges" will be paid by Contractor All deposrts will be made mto a smgle account estabhshed for the Golf Club Settlements and appropnate disbursements will be made from tlus account Contractor shall be respons�ble for any loss or theft of City funds wlvle the same aze m rts possession or control Contractor shall provide City w�th a fidelrty bond and a performance bond as requ�red m t}us Agreement Contractor and any subcontractor shall comply w�th accounhng procedures as may be reqmred by the City to comply wrth state laws, regulahons and audit review requuements D Reports Contractor shall provide to the C�ty datly reports of golf achvity and receipts m a format to be provided by the Director and Fmance Officer, and shall structure their accountmg system m a method sahsfactory and acceptable to the City The reports will be forwazded to the Duector and must be received by the 2nd busmess day followu�g the day of achv�ty, excludmg Fndays, Saturdays and Sundays wluch will be due on Tuesdays The reports must agree with the conespondmg depos�t for the day In addition, the Contractor shall submit a copy of rts previous year's operaUng statement by Mazch 31 to demonstrate Contractor's financial ab�hty to mamtam operat�ons under th�s Agreement E Aud�ts All revenue and fees collected at the Golf Club aze City revenues and sub�ect to audtt by the State Auditor, City Internal Auditor, or C�ty hired Certified Public Accountants Contractor shall pernut the City, from time to t�me as the C�ty deems necessary, through its des�gnated representatrves, to mspect and audit m Bremerton, Washmgton, at any reasonable time, all pertment books and records of Contrac[or and any other person or entity that has performed work m connect�on w�th or related to Contractor's services under tlus Agreement to venfy the accuracy of accountmg records and shall supply the Crty with, or shall permit the City to make a copy of any books and records and any portion thereof, upon the City's request GoljMaxagement Agreement Page 10 of 20 Contractor shall ensure that such mspect�on, audit and cop}nng nght of the C�ty is a condit�on of any contract, agreement or other azrangement under wh�ch any other person or entity is permitted to perform work m connect�on with or related to Contractor's services under this Agreement The Contractor shall take �mmed�ate correchve action on all pnor, current or future mtemal control weaknesses as directed by the C�ty F Taxes Pursuant to the City's bond resolutions on the Golf Club facilihes, the Contractor will remit to the City all gross revenues collected Sales tax from Contractor's activihes remrtted to the Crty will be held by the Crty and will be returned to the Contractor weekly or as otherwise agreed C�ty shall retam and rem�t sales taaces on revenues from green fees sales As an mdependent contractor, the Contractor acknowledges that it �s respons�ble for payment of any local, state, mcludmg busmess and occupat�on tax, or £ederal taxes or fees with respect to the Contractor's busmess, mcludmg sales tax, for rts achvihes The Contractor shall pay any and all apphcable taxes when due G Cred�t Card Costs and Fees Contractor shall be respons�ble for all credrt card costs and related fees mcurred for Contractor's busmess pursuant to tivs agreement (ie lessons) and the City shall be responsible for cred�t cazd costs and related fees mcurred for the City's business pursuant to tlus agreement (ie greens fees) SECTION 11 MAINTENANCE OF RECORDS The Contractor shall keep and mazntazn on a current basis all books and records, mcludmg the operatmg accounts, to support its management and operahons of the Prem�ses under ttus Agreement The City or its authonzed representahve shall have the authonty to mspect, audrt, and copy, upon reasonable nohce and from tune to t�me, any records of the Contractor regazdmg rts bilhngs, payments or work under ttus Agreement Contractor shall reta►n these records for mspechon, audrt, and copymg for at least ttu (3) yeazs from the date of complehon or termmahon of tlus Agreement, or as otherwise requ�red by the Waslungton Secretary of State General Records Retenhon Schedule for all Local Govemment Agencies m Wastungton State Contractor shall, at all tunes, provide the City with all records for the pnor three (3) yeazs that relate to the financial matters of the Prem�ses managed by Contractor under tlus Agreement SECTION 12 AUDIT OF PAYMEN'I'S The City, erther duectly or through a designated representarive, may audit the records of the Contractor at any hme dunng the three (3) year penod estabhshed by Sechon 11, MAINTENANCE OF RECORDS If an audit discloses that payments to the Contractor under Sechon 7, COMPENSATION, were ui excess of the amount to wluch the Contractor was entitled, or that the payments to the City were less than the amount to wh�ch the C�ty was entitled, then Contractor shall repay the amount of the excess or deficiency to the City If an audit discloses that payments to the Cety under Sechon 7, COMPENSATION, were m excess of the amount to wtuch the City was enhtled, or that payments to the Contractor were less than the amount to wluch the Contractor was entitled, then the City shall repay the amount of the excess or deficiency to the Contractor Golf Management Agreement Page 11 of 20 SECTION 13 ASSIGNMENT Contractor shall not e�ther voluntanly or by operation of law assign, transfer, mortgage, pledge, hypothecate, or encumber this contract or any mterest therem and shall not subcontract the obligarions under th�s Agreement, or any part thereof, or allow any person (employees, agents, servants, and mvitees of Contractor excepted) to use the Golf C(ub Facilities, or any portion thereof, w�thout the pnor wntten consent of the C�ty Any such ass�gnment, subcontrachng or use without compliance w�th the terms of th�s puagraph shall be void and shall conshtute a default under the tettns of this Contract If Contractor is a corporation, any transfer of tlus Contract from Contractor by merger, consol�dation, or l�quidahon, or any change m the ownerslup or power to vote m a ma�onty of the outstandmg voring stock of Contractor shall constitute an assignment for purposes of this pazagraph Any consent to one ass�gnment, subcontractmg, or use by any other person shall not be deemed to be a consent to any subsequent assigiunent, subcontrachng, or use by another person Consent to any such ass�gnment, subcontrachng or use shall m no way reheve Contractor of any liability under th�s Agreement Ass�gnment by Contractor to a financial mshturion holdmg a secunty mterest m tlus Agreement shall not be cons2dered to be a violation of the consent requ�rements of this Agreement Consent for any subsequent ass�gnments by sazd financial mshtuhon will not be unreasonably withheld, however, any assignee must have expenence and be lmowledgeable �n golf and food and beverage operahons SECTION 14 TERMINATION Tlus Contract will termmate upon the happemng of any of the followmg events A Upon rts normal termmahon if not renewed B Upon termmahon of the Lease and/or Food and Beverage Agreement C Upon the death of both of Contractor's Pnnc�pals D By mutual wntten agreement E Breach of th�s Agreement as set forth m Sechon 15 below F Ma�or damage or deshuchon of the golf Club property, structures or eqwpment that is the sub�ect of tlus Agreement, when the City decides not to rebuild, and that damage or destructton will prevent Contractor from substanhally performmg the�r obhgahon under ttus Agreement SECTION 15 BREACH A In the event that either party clazms that the other is m a substanhal breach of any of the provisions of th�s Contract, notice of the breach shall be submitted to the party alleged to be in breach and the party m breach shall have th�rty (30) days from rece�pt of the notice wrthm which to correct any achvity or conduct claimed by the other to have conshtuted a substanhal Go[f Managenrent Agreement Page 12 of 20 breach of this Contract The not�ce shall ident�fy the nature of the breach and the contract provtsions violated B In the event that the party m breach shall fazl to correct the act�vity claimed to constitute a substant�al breach of this Contract w�thm th�rty days of rece�pt of the not�ce of breach, the party cla�mmg breach may 1 Issue a nohce of termmation, and/or 2 Seek�udictal remedy or specific performance, and/or 3 Pursue any other remedy available at law or eqwty C The Contractor is sub}ect to immed�ate termmahon upon wntten notice by City if 1 Contractor violates any fiduciary duty to the C�ty by rrusappropnahng or not properly accountmg for or m�shandhng Crty funds as determmed by the C�ty or Waslvngton State Audrtor, or 2 Contractor vacates or abandons the Golf Club facil�hes under Contractor's responsibility D Upon rece�pt of nohce of termmahon by Contractor, which is issued by the C�ty, the City shall have the nght to 1 Enter and take possesston of the facilrt�es, and/or 2 Bnng surt for and collect all fees and portions of gross revenue or any other momes required to be paid to the Crty wtuch shall have accrued to the time of termmation of the Contractor's nghts E Upon wntten notrce of temunarion by the City, Contractor will have t}urty (30) days to vacate the Preuuses unless the City elects to take immediate possession as set forth m paragraph D above Termmahon shall be affected by servmg a Nohce of Termmahon by certified mazl (return receipt requested) or by personal delivery upon the Contractor sethng forth the manner m wluch the Contractor is m default F Neither the City nor the Contractor shall have breached tivs Contract by reason of the closmg of all or a portion of the golf course facilrt�es as set forth m Sechon 7(D) and (E) G Examples of a breach by the Contractor wluch warrants termmahon, if not cured, shall include but not be limited to 1 M�sappropnahon or m�shandhng of C�ty funds 2 Contractor makes any general assignment or general arrangement for the benefit of creditors or the filmg by or agamst Contractor of a petit�on to have Contractor ad�udicated as bankrupt, or a petit�on for reorgamzaUon or arrangement under any law relatmg to baiil�uptcy (unless, m the case of a pehhon filed agamst Contractor, the same is dism�ssed withm sixty (60) days or the appomtment oF a trustee or a receiver to take possession of substanttally all of Contractor's assets located at the Premises or of Contractor's mterest m th�s Agreement, where possession is not restored to Contractor withm tlurty (30) days or the attachment, execut�on, or other �udicial se�zure of substanhally all of Contractor's assets located Co[f Management Agrew�:ent Page 13 of 20 at the Prem�ses or of Contractor's mterest m this Agreement where such se�zure �s not d�scharged within tlurty (30) days 3 Contractor ass�gns all or part of �ts �nterest m this Agreement w�thout pnor written consent of the City pursuant to Sechon 13 4 Nonpayment of outstandmg current habilihes withm nmety (90) days and failure to pay Federal, State, and loca] taxes and license fees when due 5 Conhnumg mattention or neglect of duties 6 Suspension from the PGA resulhng m a s�tuahon where neither pnncipal �s a member of the PGA for more than thirty (30) days 7 Conviction of a felony or convicrion of a non-felony cnme of dishonesty, theft or deceit of either of the Pnncipals SECTION 16 PURCHASE OF CONTRACTORS MERCHANDISE In the event the City takes over management of the Golf Club facilihes, after exp�ration of th�s Agreement or earher termmation by the C�ty, Contractor reserves the nght, if it so elects at �ts d�screhon, to require C�ty to purchase the Contractor's Pro shop and dnving range merchandise and moveable fiimishmgs idenhfied m Exh�bit A at Contractor's cost less depreciat�on mutually agreed upon If there is no agreement, tlus amount shall be estabhshed by a mutually agreed upon mdependent appra�ser The City shall make payment witlun 90 days of expirahon or termmahon, less any momes owmg to the City under the terms of tlus Agreement, the Food and Beverage Agreement or under the terms of the Lease Should Contractors sunply abandon any items set forth above, they shall immediately become the property of the City SECTION 17 INDEPENDENT CONTRACTOR A The Contractor is engaged as an mdependent contractor and will be responsible for any federal, state, and local taxes and fees apphcable to payments hereunder B The Contractor, �ts subcontractors, and theu employees, aze not employees of the City and aze not ehgible for any benefits through the City, uicludmg without l�mrtahon federal social secunty, health benefits, workers' compensation, unemployment compensahon, and rehrement benefits C The parties agree and aclmowledge that the Contractor �s an mdependent contractor and not the agent or employee of the City of Bremerton, and that no l�ability shall attach to the City as a result of the acts or orruss�ons of the Contractor, its agents or employees D The Contractor shall be responsible for withholdmg and paymg all payroll taxes for any person tured by them to perform the duhes they aze required to perform under the terms of th�s agreement They aze also responsible for all taxes owed to any govemmental agency as a result of the momes paid to them under the terms of this Agreement Colf Management Agreen:ent Page 14 of 20 SECTION 18 INDEMNIFICATION, INSURANCE, BOND A Indemn�ficat�on 1 Contractor agrees to defend, mdemmfy and save harmless the City, its appomted and elected officers, employees and volunteers, from and agamst any and all liability, loss, cost, damage and expenses, mcludmg costs and attorney fees m defense thereof because of actions, claims or lawsu�ts for damages resultmg from personal or bodily m�ury, mcludmg death at any time resultmg there from, sustamed or alleged to have been sustained by any person or persons and on account of damage to property, ansmg or alleged to have ansen directly or mdirecfly out of or m consequence of or the performance of th�s Agreement, whether such m�unes to persons or damage to property is due to the w�llful or neghgent acts or omissions of Contractor, their subcontractors or agents This provision shall be mapplicable to the extent the Crty is �udic�ally found solely negl�gent for such damage or m�ury 2 Should a court of competent �unsd�chon determme that th�s Agreement is sub�ect to RCW 4 24 115, then, m the event of liability for damages ansing out of bod�ly m�ury to persons or damages to property caused by or resultmg from the concurrent negl�gence of the Contractor and the City, its officers, offic�als, employees and volunteers, the Contractor's liability hereunder shall be only to the extent of the Contractor's negligence B Insurance Requirements 1 The Contractor shall procure and mamta�n for the durahon of th�s Agreement, insurance agamst claims for m�unes to persons or damage to property wluch may anse from, or m connechon with, the performance of the work hereunder by the Contractor, its agents, representahves, employees or subcontractors 2 The Contractor shall provide a Ceruficate oflnsurance evidencmg a Automobtle Lzabzltty Insurance with no less than $1,000,000 combmed smgle hmrt per accident for bodily m�ury and property damage, and b Commerceal General Ltab:lety Insurance wntten on an occurrence bases with l�mits no less than $1,000,000 combmed smgle hmit per occurrence and $2,OOQ000 aggregate for personal m�ury, bodily m�ury, and property damage Coverage shall mclude but not be limited to blanket contractual, products/completed operahons, broad form property damage, hquor habihty, and employer's habiltty 3 Any payment of deductible or self msured retenhon shall be the sole responsibihty of the Contractor 4 The City, mcludmg �ts officials, employees, and volunteers, shall be named as an addrtional msured on the msurance pohcy, with respect to work performed by, or on behalf of, the Contractor and a copy of the endorsement nammg the City as additional msured, approved by the City's R�sk Manager, shall be attached to the Cert�ficate oflnsurance 5 The Contractor's msurance shall contazn a clause statmg that coverage shall apply separately to each msured agaznst whom cla�m �s made or suit is brought, except with respect to the limits of the msurer's liability 6 The Contractor's msurance shall be the pnmary and non-contnbutmg msurance wrth respect to the Crty's msurance and the Crty shall be g�ven thirty (30) days pnor wntten notice of any cancellation, suspens�on or matenal change m coverage Colf Management Agreement Page 15 of 20 7 Acceptab►I�ty of Insurers Insurance �s to be placed w�th an msurer with a Bests' ratmg of no less than A XIII, or w�th an msurer acceptable to the City 8 Subcontractors Contractor shall �nciude all subcontractors as msureds under its policies or shall fumish sepazate cert�ficates for each subcontractor All coverage for subcontractors shall be sub�ect to all of the requirements stated herem C Band The Contractor shall contmuously mazntam at �ts expense an employee dishonesty bond covenng collect�on of fees on the Premises for the benefit of the City The bond shall be m an amount not less than SEVENTY-FNE THOUSAND AND NO/100 DOLLARS ($75,000 00) The Contractor must add�honally provide broad form money and secunt�es coverage both mside and outside the Premises m an amount not less than FNE THOUSAND AND NO/100 DOLLARS ($5,000 00) D Proof of Insurance Proof of the above requuements must be provided to the Crty upon execution of this Agreement The pohcies requved herem shall provide not less than tkurty (30) days pnor wntten nohce to the City of any cancellahon, expirahon, modificahon, or reduchon m coverage or liabilrty ]�mrts SECTION 19 SUBCONTRACTING The Contractor shall not subcontract �ts work under ttus Ageement, m whole or m part, without the wntten approval of the Crty The City reserves the nght to review and approve any subcontracts pnor to execuhon to ensure compliance wtth the provisions of tlus Agreement The Contractor shall reqture any approved subcontractor to agree, as to the portion subcontracted, to comply with all terms and condihons as specified m this Agreement Notwrthstandmg City approval of a subcontractor, the Contractor shall remau► obligated for full performance hereunder, and the City shall mcur no obl�gahon other than its obhgations to the Contractor hereunder Any subcontracts approved by the C�ty shaU be sub�ect to and shall not extend any rights granted beyond those set forth ►n th�s Agreement to Contractor Contractor agrees that �f subcontractors aze employed m the performance of tlus Agreement, Contractor and its subcontractors are sub�ect to the requirements of the State of Waslungton, Workers' Compensatton Laws SECTION 20 CONDITION OF PREMISES The Contractor has mspected and exam�ned the Premises and all facil�ties and fixtures thereon and accepts the same m its present condihon The Contractor shall not make any alterahons, changes, or add�hons to the Clubhouse or to any fixtures or equipment owned by the C�ty without the wntten consent of the Director The Contractor shall not commrt, perm�t, or allow any nuisance, waste, or m�ury m, upon, or to the golf course, or to permrt the use of the golf course for any tllegal or immoral purpose SECTION 21 NOTICE Any not�ce provided for under ttus Agreement shall be sufficient if m wnring and delrvered personally to the followmg addressee or deposited m the Umted States Mail, postage prepud, certified mail, retum rece�pt requested, addressed as follows, or to such other address as the receivmg party hereafter shall spec�fy m wnhng Go[f Management Agreement Page 16 of 20 City Director of Parks and Recreahon City of Bremerton 345 6th Street, Suite 600 Bremerton, Washmgton 98337 Contractor SECTION 22 PAYMENTS TO VENDORS AND SUBCONTRACTORS The Contractor shall pay timely all suppliers, lessors, and contractors providmg services, matenals or equipment for carrymg out its obhgahons under th�s Agreement The Contractor shall not take or fazl to take any act�on m a manner that causes the C�ty or any matenals that the Contractor provides hereunder to be sub�ect to any claim or lien of any person without the City's pnor wntten consent SECTION 23 BUSINESS LICENSE Contractor shall obtam a C�ty of Bremerton business l�cense as reqwred by Chapter 5 02 of the Bremerton Crty Code pnor to begmmng work under this Agreement SECTION 24 CONFIDENTIALITY OF RECORDS The City will, to the extent allowed by law, keep all of Contractor's and subcontractor's financial cost mformahon confident�al, unless requ�red to d�sclose the mformation as a result of the Waslungton Pubhc Records Disclosure law, Ch 42 56 RCW or by court order SECTION 25 PRIOR CONTRACT EXTENSIONS SUPERSEDED AND TERNIINATED The pnor agreement between the C�ty and Contractor for these services had an expvahon date of December 31, 2006 wluch has rivice been extended pendmg negohahon of tivs agreement The extensions were executed wrth the understandmg that new terms may be negohated for a new agreement beg�mm�g with the year 2007 Accordmgly, tlus Agreement supersedes the terms and condrtions of the fourth amendment extendmg the 2006 agreement executed on January 18, 2007 and the fifth amendment extendmg the 2006 agreement executed on or about Apn12, 2007 to the extent tlus Agreement is mconsistent w�th the pnor agreement and amendments and upon execuhon of th�s Agreement, sazd agreement and amendments shall termmate SECTION 26 OTHER A Costs and Attorney Fees If, by reason of any default or breach on the part of erther party m the performance of any of the prov�sions of thss Agreement, a legal act�on is mshtuted, the losmg party agrees to pay all reasonable costs and attomey fees m connechon therewith It is agreed that the venue of any legal achon brought under the terms of th�s Agreement shall be m Kitsap County Colf Management Agreeneent Page 17 of 20 B Construct�on Th�s Agreement shall be construed m accordance w�th the laws of the State of Washmgton The provis�ons of th�s Agreement have been negotiated by the parttes, and when interpretmg the provisions of th�s Agreement, there shall be no presumption of draftsmanship for or against either party C Severabd�ty The mvandity or unenforceabilrty of any prov�sion hereof shall m no way affect the validity or enforceability of any other prov�s�on D Waiver Failure to msist upon smct compliance with any terms, covenants or condihons of ttus Agreement shall not be deemed a warver of such, nor shall any waiver or relmquishment of such nght or power at any tune be taken to be a waiver of any other breach The City and the Contractor shall not be deemed to have waived any breach of th�s Agreement by the other party except by an express waiver m wntmg An express wntten waiver as to one breach shall not be deemed a wazver of any other breach not expressly ident�fied, even though the other braach �s of the same nature as that waived E Amendment The City and the Contractor may amend this Agreement at any hme only by wntten amendment executed by the City and the Contractor The City and the Contractor agree that tlus Agreement shall be amended at any tune �f, m the opimon of bond counsel to the City, such amendment is necessary to preserve the tax exempt status of mterest on obhgahons of the City issued to finance the Golf Club F Enhre Agreement Ttus Agreement contams the entue agreement beriveen the parttes wrth regazds to the sub�ect matter sei forth herem 1'here aze no other representahons with regards to the sub�ect matter, either orally or m wnring From January 1, 2007 unhl execuhon of tivs agreement, tlus agreement supersedes the pnor agreement between the City and Contractor for these services wluch had an exp�raUon date of December 31, 2006 and wivch has twice been extended by amendments on January 18, 2007 and on or about Apnl 2, 2007 pendu►g negotrat�on of a new agreement Upon and followmg the execuhon of tlus Agreement, tlus agreement w�ll replace the pnor agreement m rts entuety G Nondiscr�mmahon Contractor shall not discnmuiate m employment or sernces to the pubhc on the basis of race, color, nahonal ongm, sex, rehgion, age, mantal status, physical, mental or sensory disab�lity except m an employment achon based on a bona fide occupahonal quahficahon H L�ens The Contractor agrees that �t shall pay, or cause to be pazd, all costs and expenses for work done and matenals delrvered to the Prenuses and shall keep the Prem�ses free and cleaz of all liens for work performed thereon I Remedies R�ghts under this Agreement are cumulatroe, the fa�lure to exercise on any occasion any nght shall not operate to forfeit such nght on another occasion The use of one remedy shall not be taken to exclude or wazve the nght to use another Golf Maxageme�rt Agreement Page 18 of 20 J Washmgton law and Forum This Agreement shall be construed accord�ng to the law of the State of Washmgton Any I�hgat�on between the C�ty and the Contractor ansmg under this Agreement or out of work performed under th�s Agreement shall occur, if m the state couds, m the ICitsap County Court havmg �unsd�ction thereof, and if m the federal courts, m the United States D�stnct Court for the Westem Distnct of Washmgton CI B N SCO T ALEXANDER'S GOLF SHOP, INC �.7� tl� � CARY BOZEMAN, Mayor By S OTT ALEXANDER Its �t£�'��'T DATE �" � 3— �7 DATE R IL o� � By DARYL M T ENY Tts (i(/ DATE �'1I��{o� ATTEST Paula Johnston, City Cler ��— APPROVED AS TO FORM R ER L OVICH, City Attome GoljMa�eagenient Agreenient Page 19 of 20 � EXHIBIT A Pro Shoa Moveable Furn�shmes I Slotwall 2 Dnver Racks 3 Putter Racks 6 Clothes Racks 2 Full Set Racks 1 4-Set Rack 1 Neshng Table 1 TV 1 Hat Rack I Range Picker 1 Range Dispenser 1 Washer and Dryer 1 Range Cart 1 Janrtonal Supphes 1 Lammator 2 Fax Mactunes 4 Tables for Golf Balls Chnshnas and other seasonal decorahons Cones for Shotgun Starts 9 File Cabmets 1 Fue Pit and Chau�s R U.agal�Legal�F�les\Cunent Achve Files\Gold Mountam\Golf Managemrnt Agreement - FINAL doc Golf Management Agreement Page 20 of 20 Contract Number: 4653 Vendor: SCOTT ALEXANDER'S GOLF SHOP INC Subject: Golf Management Department: Parks File Class: LEG 12-1 Begin Date: O1/O1/2007 End Date: 12/31/2010 Review Date: 09/01/2010 Vault Date: Comments: Amendment 12/09 . AMENDMENT TO GOLF MANAGEMENT AGREEMENT WHEREAS, on September 13, 2007, the City of Bremerton, a municipal corporation of the State of Washington, "City" and Scott Alexander's Golf Shop, Inc., a Washington corporation, "Contractor" entered into and Agreement to provide professional golf management and services at the City of Bremerton Gold Mountain Golf Club; and WHEREAS, the term of the Golf Management Agreement commenced on January 1, 2007 and shall terminate on December 31, 2009; and WHEREAS, the parties desire to amend the Agreement to extend the term through December 31, 2010; NOW THEREFORE, for mutual consideration, City and Contractor agree as follows: Section 3 of the Agreement is hereby amended to extend the termination date of the Golf Management Agreement to December 31, 2010. All other terms of the Agreement not specifically amended herein shall remain in full force and effect. CITY OF BREMERTON SCOTT ALEXANDER'S GOLF SHOP, INC. � �� «��' , Mayor By: SCOTT ALEXANDER Its: DATE: DATE: By: DARYL MATHE Its: DATE: �� � O ATTEST: � ' � Carol Etge , City Clerk APPROVED AS TO FORM: � RO R LUBOVICH, City Attorney R:\Legal\Legal�Files\Current Active ' old Mountain\Golf Management Agreement Amendment (2009).doc Amendmentto GoljManagementAgreement Contract Number: Vendor: Subject: Department: File Class: Begin Date: End Date: Review Date: Vault Date: Comments: 4653 SCOTT ALEXANDER'S GOLF SHOP INC Golf Management Parks LEG 12-1 01/01/2007 12/31/2009 09/01/2009 GOLF MANAGEMENT AGREEMENT THIS AGREEMENT made and entered into on the date fully executed by and between the CITY OF BREMERTON, a municipal corporation of the State of Washington, hereinafter referred to as "City," and SCOTT ALEXANDER'S GOLF SHOP, INC., a Washington Corporation, hereinafter referred to as "Contractor," to provide professional golf management and services pursuant to this Agreement, at the City of Bremerton Gold Mountain Golf Club. WHEREAS, the City is the owner of Gold Mountain Golf Club, which ownership includes the land upon which said golf complex is located, the buildings and other improvements which are a part thereof; and WHEREAS, the Gold Mountain Golf Club consists of two 18 hole golf courses, the Olympic and the Cascade course, ("Golf Courses" or "Courses"), a driving range, and the clubhouse containing a Pro Shop, restaurant, meeting rooms and the Olympic room, ("Clubhouse") and other related facilities and structures, collectively also referred to herein as ("Golf Club") WHEREAS, the City previously entered into an agreement with Scott Alexander and Daryl Matheny, Contractor's principals ("Principals"), for food, beverage, and golf management and related services at the Gold Mountain Golf Club; including, but not limited to, food and beverage service, management of the Cascade and Olympic golf courses and driving range, and for providing P.G.A. professional golf services and lessons to the facility; and WHEREAS, the agreement between the City and Contractor for these services expired December 31, 2006 which has twice been extended by amendments to said agreement pending negotiation of a new agreement; and WHEREAS, the extensions were executed with the understanding that new terms may be negotiated for a new agreement beginning with the year 2007; and WHEREAS, the City desires to enter into a new agreement with Contractor for management of the Cascade and Olympic golf courses, Clubhouse, driving range and Pro Shop, and for providing professional golf services and lessons to the facility entitled "Golf "Management Agreement" effective January 1, 2007 and superseding the terms of the extended agreement; and WHEREAS, the parties hereto have simultaneously executed a separate agreement entitled "Food and Beverage Agreement" relating to the food and beverage service at the Gold Mountain Golf Club; and WHEREAS, the parties hereto have also simultaneously executed a document entitled "Lease Agreement" relating to the lease to the Contractor of a certain portion of the Gold Golf Management Agreement Page 1 of 20 Mountain Golf Club (the "Lease") for operation of a Pro Shop, driving range and Contractor's private cart rental business. It is the intent of this Agreement to have the Contractor provide management services to the Gold Mountain Golf Club in accordance with the terms and conditions of this Agreement; and WHEREAS, it is the intent of this Agreement that the Contractor operate the facilities covered herein in such a manner as to generate and provide revenue at or above a level sufficient to meet bond payment obligations and operating expenses paid by the City for the Gold Mountain Golf Club. NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows: SECTION 1. PURPOSE AND ADMINISTRATION. A. The purpose of this Agreement is to establish a management services agreement whereby contractor will provide certain management and related services at City-owned golf facilities. This Agreement is not a lease, nor does it create a leasehold interest other than similar property interest in Contractor to the City's facilities. B. Contractor will be responsible for performing all work and/or services described herein. The Contractor's performance will be monitored and reviewed by the City of Bremerton Director of Parks and Recreation, or his or her designee, (hereinafter "Director"). Contractor shall report directly to the Director and work closely with the Greens Superintendent. Reports and data required to be provided by the Contractor shall be delivered to the Director. Questions of the Contractor regarding interpretation of the terms, provisions and requirements of this Agreement shall be addressed to the Director for response. SECTION 2. PREMISES. The facilities of the Golf Club to be managed by the Contractor pursuant to this agreement include, the Golf Courses, the Clubhouse and related facilities, hereinafter ("Premises"). SECTION 3. TERM. Pursuant to IRS Revenue Procedure 97-13, the term of this Agreement shall be three (3) years commencing on January 1, 2007 (the "Commencement Date") and shall terminate on December 31,2009, unless terminated earlier in accordance with Section 14. SECTION 4. SCOPE OF SERVICES. A. General Services. The Contractor's responsibilities include promoting and managing the use of the Golf Courses; the collection of fees; staffing the courses, including starter services and marshals; management of the Clubhouse and areas of Contractor's responsibility at the driving range, except as otherwise agreed upon between the parties in writing. Golf Management Agreement Page 2 of 20 B. Specific Services. In providing the general services described above, Contractor shall provide not less than the following specific services: 1. Olympic and Cascade courses. a. Contractor shall provide an adequate number of starters, agreed upon by both parties, deemed necessary for the courses to facilitate a good golf operation. Contractor shall be responsible for all starting of golf play and for control of the first tee at all times. During peak play times for each season as identified herein, Contractor must provide a course marshal a minimum of 346 hours per week for the months of May through September, 148 hours per week for the months of March, April and November, and seven hours per week for the months of November and December. On days when the tee sheet is not full, Contractor may adjust this minimum downward to the extent start times are not materially affected. In case of extended periods of inclement weather, this requirement can be waived by mutual agreement of the Director of Parks and Recreation and Contractor. In such case, the compensation will be adjusted accordingly upon mutual agreement. b. All counter staff at the courses shall be experienced, trained, and knowledgeable of golf operations and course rules. c. Contractor shall provide an adequate number, as agreed upon by both parties, of golf clubs, bags, and pull-carts for rent to users at the courses. d. Contractor shall operate and maintain a service for the handling, sales, and leasing of golf equipment and for leasing of carts for operation of the Golf Club operations. e. In cooperation with the Director and Golf Complex Board of Directors, established pursuant to Chapter 2.34 of the Bremerton Municipal Code (the "Golf Complex Board"), Contractor shall schedule all golf tournaments and shall initiate and promote golf activities at the Golf Club. f. The Contractor and Greens Superintendent shall mutually agree upon the open and start of play daily with the Director resolving any conflicts. 2. Driving Range and Pro Shop. a. The Contractor agrees to maintain and operate the driving range and Pro Shop in conjunction with the services provided in this agreement. The driving range and Pro shop shall be maintained and operated in accordance with the Lease between the City and Contractor for the facilities. 3. Lessons. a. The Contractor may provide competent golf instruction to all groups and levels of public players, including juniors. Qualified P.G.A. members or registered assistants must be available to conduct lessons. All revenues received and costs incurred by Contractor for lessons shall be revenue and costs of the Contractor. b. All lesson gross revenue shall be paid directly to the Contractor or subcontractor and shall not be included in the City's revenue receipts. 4. Gift Certificates. Contractor will sell gift certificates for merchandise, restaurant, green fees, and lessons. Sale of these certificates will be in accordance with internal Golf Management Agreement Page 3 of 20 controls as approved by the City. Contractor shall maintain a log showing all unredeemed outstanding certificates. 5. Clubhouse Management. a. The Contractor shall manage the Clubhouse for the City. This shall include operating and maintaining the restaurant and lounge in accordance with the Food and Beverage Agreement between the City and Contractor. b. Contractor shall maintain the facilities in a clean, neat and hygienic condition. Contractor shall provide basic janitorial services, including supplies necessary to provide adequate janitorial services. These services shall include, but not be limited to: i. Cleaning all carpets annually, 11. Vacuuming floors at least daily during peak season, 111. Cleaning restrooms and all common areas at least daily, iv. Providing periodic spot checks of restrooms to replenish supplies and paper products and attend to problems as needed, and v. Clean windows and clean patios, sidewalks and other common areas as needed. c. The Contractor shall maintain the Clubhouse, and exterior patios, including garbage containers around Clubhouse buildings and entryways, in a clean, well kept, orderly manner to the satisfaction of the City. Contractor shall conduct minor maintenance and repairs to interior facilities and fixtures, including lights, plumbing, and locks associated with Contractor's area of responsibility. d. The Contractor shall provide maintenance and repair services for all FF &E within the Clubhouse, Contractor owned tools and equipment, and all Contractor leased equipment. Replacement of City owned equipment shall be in the sole discretion of the City and the City shall arrange for equipment replacement in accordance with available funding. e. Contractor shall be responsible for the costs of supplies for operations at its cost and expense. 6. Advertising. a. The Contractor shall annually provide to the Director for approval an advertising and promotion plan for the Golf Club, which approval shall not be unreasonably withheld. Contractor shall spend a minimum of $35,000 per year for advertising for the Golf Club operations. b. Contractor shall obtain City approval for all advertisement for commercial vendors unrelated to concession operation on score cards, benches, entryways, etc. Contractor agrees to honor contracts with existing advertising vendors until said contracts expire. 7. Attend Meetings. Contractor agrees to be available to attend regular and special meetings of the Golf Complex Board, Parks and Recreation Commission and City Council, and shall be prepared to discuss issues and ideas of interest to the Contractor and City. C. Pricing of Golf Services. 1. Green fees are established by City Council following a review and recommendation of the Golf Complex Board. The City reserves the right to establish fees for residents, residential preferential programs, and events sponsored by local businesses and organizations, as well as non-resident fees. Fee adjustments must be approved by the City Golf Management Agreement Page 4 of 20 Council except that the Director may establish discount rates for promotional purposes. Contractor, as an ex-officio member of the Golf Complex Board, shall have input on pricing of golf services. 2. All tournament fees will be set by the Contractor subject to review and final approval of the Director. SECTION 5. OTHER DUTIES AND RESPONSIBILITIES. A. Performance of Duties. The Contractor shall devote their attention and energies to the performance of duties as golf Contractor for the City during the term of this Agreement. They shall conduct themselves at all times and in all matters in accordance with the standards accepted for golf Contractor as established by the Professional Golfers Association (hereinafter "PGA"). The Contractor shall operate the facilities and programs under their direction and control so that they will meet or exceed the standard in the industry for public golf courses in the Puget Sound region. B. Personnel. The Contractor shall provide competent personnel necessary for such operations and shall train and supervise them in their work and shall pay them for their services at the Contractor's sole cost and expense. Contractor shall supervise, direct and train staff to perform duties and meet requirements for sales, rentals and services which are, in the opinion of the City and Contractor, necessary. Contractor shall provide an on-going staff training program with emphasis on customer training. There will be a minimum of two PGA professionals on staff including the Principals of Contractor. At least one of the PGA professionals must be on site daily during peak business hours of the Golf Club. C. Credit Rating. Contractor shall maintain a good credit rating in all commercial transactions so as not to discredit the reputation or name of the City of Bremerton. D. Tournament Play. The Contractor shall have the right and are expected to represent the City of Bremerton in various golf tournaments. They shall submit their tournament schedule for information to the Director. In the event they qualify, they shall have the right to play in the U.S. Open, Masters, the PGA National Championship, and the Club Contractor's Championship, or any tour event held locally. E. Security. The City has installed a monitored burglar alarm system at the Clubhouse and Pro Shop, and the City will pay the monthly service charge for the system. Contractor is responsible for setting the alarm, insuring that it is properly operating and notifying the City if it is in need of repair. F. Inspections. The Contractor will make a daily physical inspection of the complex and report any unusual or unsafe conditions observed during said inspection to the Director immediately. Such reports shall be followed up in writing. Golf Management Agreement Page 5 of 20 G. Quarterly Review. Contractor and City shall meet on a quarterly schedule, or as otherwise as mutually agreed, to evaluate operations at the Golf Club and the performance of the parties pursuant to this agreement and to make mutually agreeable changes. SECTION 6. OPERATING POLICIES AND PROCEDURES. The Contractor will: A. Operate the Golf Club pursuant to the rules and regulations established by the City Council and the Director. B. Expel unruly persons or those under the influence of intoxicants from the Premises under Contractor's control. C. control. Not foster nor permit any illegal activity on the Premises under Contractor's D. Answer and handle all complaints and shall supervise a public relations program. In dealing with the public, Contractor will not speak toward City policies or decisions in a derogatory manner. Contractor shall explain and support city policies to staff and the golfing public. E. Not use the Premises for ancillary, revenue-producing activities, or social activities unless expressly authorized by the City. The parties acknowledge that Contractor conducts certain private business operations pursuant to the Lease executed with the City for operation of a Pro Shop, driving range and Contractor's private cart rental business and further that Contractor subcontracts lessons at the Golf Club. F. Regulate the play and conduct of all persons on the golf course, including keeping off trespassers and preventing injury to the golf course by players and others. G. Not allow any person to be afforded free use of the golf course unless approved by.the Director. H. Supervise all golf activities in connection with outside parties and shall provide members of the golfing public with adequate services, as may be required. I. Provide service to meet public demand and shall keep the Clubhouse open each day that the golf courses are open for play, and at other reasonable hours as prescribed by the City, except Thanksgiving and Christmas, at Contractors option, days the Greens Superintendent closes the course due to inclement weather and except as set forth in Section 7(D) and (E). SECTION 7. COMPENSATION. A. Contractor shall be compensated for services as follows: 1. Course and Facility Management Fee. Golf Management Agreement Page 6 of 20 a. Fixed Fee - Year 2007. Contractor shall be paid the annual sum of three hundred fifty-five thousand eight hundred fifty dollars ($355,850). This fixed fee compensation shall be paid in weekly installments of $6,843.27 or as otherwise agreed. b. Fixed Fee - Years 2008 and 2009. Contractor shall be paid the annual sum of three hundred eighty-five thousand eight hundred fifty dollars ($385,850). This fixed fee compensation shall be paid in weekly installments of $7,420.19 or as otherwise agreed. c. Percentage (Greens) Fee. In addition, throughout the term of this contract, Contractor shall be paid ten percent (10%) of revenues received from greens fees, net of sales tax, in excess of $2,000,000.00 but in no event shall this percentage fee exceed the fixed fee in any given year set forth in this section. For purposes of this subsection, greens fees include daily private cart fees and all other course activities not otherwise provided for in this section, Section 7, for which revenue is received for use of the course, whether golf related or not. This percentage fee shall be paid after the end of each year. 2. Golf Rounds. For each year of this agreement, Contractor shall be paid additional compensation for customer paid golf rounds that are sold above the prior year's golf round sales as follows: Rounds 1000-1500 1501-2000 2001-2500 2501-3000 3001 and above Compensation $3,000.00 $5,000.00 $7,500.00 $15,000.00 $18,000.00 For purposes of determining compensation for golf rounds for the first year of this agreement, it is acknowledged that the prior year's (2006) golf rounds were 90,509. Payment of this compensation will be made at the end of the year. 3. Final reconciliation. Final reconciliation and payment for each year will be made by January 31 st of the following year. B. Billing and Payment Procedures. The City shall pay the amounts due to Contractor as set forth in Section 7(A). Appropriate reconciliation payments for the costs and expenses incurred by the City (i.e. credit card fees) in the current month for which the Contractor is obligated to pay under the terms of the agreement, shall be included in the reconciliation adjustments and will be deducted from the City's payment in the following month. C. Withholding of Payments to Contractor. In the event the Contractor is 60 days or later in payment of lease payments associated with the Lease, City may withhold and apply all monies due to Contractor from City under this Agreement to offset any such amounts due to City from Contractor under said Lease. D. Golf Course Closure - For Conditions and Repair. The golf course facilities shall remain open for play unless they are closed as a result of causes beyond the control, fault, or negligence of the parties. Such causes may include, without limitation, acts of God or public Golf Management Agreement Page 7 of 20 enemy; acts of the federal, state, or local governments; fires; floods; epidemics; volcanic eruptions; quarantine restrictions; strikes; freight embargoes; court orders; and unusually severe weather or other condition that causes all or a portion of the Golf Club facilities to be closed for extended periods of time. Should either the City or the Contractor fail to perform because of a cause described in this subsection, the City and the Contractor shall make a mutually acceptable revision in the SCOPE OF SERVICES and COMPENSATION provided for in this Agreement, including termination of the Agreement if the Golf Club is deemed unusable by the City as a result of major damage or destruction and the City elects not to rebuild the same. In the event that City determines that it is necessary to close all or a portion of the golf Club facilities due to regular maintenance, repair, capital improvements, inclement weather, or similar condition which results in a situation where the golf course is unsatisfactory for play, or if damage to the course and facilities is likely if it remained open, the City shall coordinate such closing with the Contractor prior to actual closing. Contractor shall comply with the Director's decision to close all or part of the course and facilities at no cost to the City. In the event of closure of all or a portion of the Golf Club facilities as set forth in this subsection, Contractor shall not be entitled to any compensation pursuant to this section, Section 7, whether fixed fee or percentage fee, however, when feasible, the City and Contractor shall revise the SCOPE OF SERVICES and COMPENSATION as noted above for partial closure of the Golf Club, unless this agreement is terminated pursuant to Section 14(F). The City shall incur no liability to Contractor for lost revenue or other additional compensation as a result of any closure of all or a portion of the golf Club facilities as set forth in this subsection. E. Golf Course Closure - For Events. In the event circumstances require the closure of the course or portions thereof for events that may result in the loss of greens fees, the Director may approve, in advance of the closure and in writing, an amount representing potential greens fees lost as a consequence of the course closure. This amount shall be used to determine what amount, if any, shall be paid to the Contractor pursuant to this section. Any amount pursuant to this section will be included in the Final reconciliation and payment as provided in this section. SECTION 8. CITY RESPONSIBILITIES. A. Golf Course grounds. 1. The City shall maintain and repair all turf and landscaped areas adjacent to the tees, greens, fairways, driving range, parking lot and the Golf Course buildings. 2. The City shall maintain and repair all building exteriors, parking lots, pathways and all of their fixed components, including structural maintenance of buildings, heating and cooling units, doors and windows, locks associated with City's area of responsibility, and lighting systems. 3. The services provided in (1) and (2) above shall be in the manner and to the extent previously provided and within defined annual budgets. Golf Management Agreement Page 8 of 20 B. Utilities. All electric power, water, sewer, gas/propane, street utility, garbage and telephone service related to this agreement shall be paid by the City. If upon review the City determines that action is needed to address excessive consumption, Contractor will promptly respond and take appropriate action to remedy the excessive consumption. Each party shall pay internet and web page costs and expenses related to their duties and responsibilities under this Agreement, unless otherwise agreed. SECTION 9. CAPITAL IMPROVEMENTS AND FIXTURES. Contractor shall not make any alterations, additions or improvements in the Gold Mountain Golf Club, including the Clubhouse, without first obtaining the consent of City in writing, which consent can be withheld at City's sole discretion. All alterations, additions and improvements, shall be at the sole cost and expense of Contractor, and shall remain in and be surrendered with the Clubhouse as a part thereof at the termination of this Agreement except for those improvements and fixtures supplied by the Contractor which at the time of this Agreement are identified on the attached Exhibit A. If Contractor performs work with the consent of City, as provided above, Contractor agrees to comply with all laws, ordinances, rules and regulations of the City and any other authorized public authority. Contractor further agrees that workmanship will be of a reasonable commercial quality, in color schemes in accordance with current building, standards, and free of mechanics liens. Contractor further agrees to save City free and harmless from damage, loss or expense arising out of such work. SECTION 10. COLLECTION OF FEES, FINANCIAL REPORTING, AUDITING AND TAXES. Pursuant to the Golf Club Revenue Bond resolutions, the City irrevocably pledged gross revenues from the Golf Club as security for bond repayment. Therefore, all gross revenues from any source shall first be deposited in the City's bank account and disbursed pursuant to this Agreement. A. Point of Sale System. City shall be responsible for purchasing, setting up and maintaining a point of sale system through which all transactions at the Golf Club will be processed. 1. City's Responsibilities. The City shall provide a cashiering system for use by the Contractor. City shall provide initial training on the operations of the cashiering system. All subsequent training of Contractor's staff shall be the responsibility of the Contractor. The City shall also be responsible for maintenance of network, wiring, software, and equipment. The City will provide repair parts as needed for equipment. 2. Contractor's Responsibilities. Contractor shall be responsible for any additional hardware, user licenses, and software that Contractor chooses to install. The Contractor shall also be responsible for operating supplies such as receipt paper, toner, and labels. Contractor shall provide additional formal training for Contractor's employees after initial training sessions have been performed by the City. New cashier employees and office managers must have suitable knowledge of the Golf cashiering system in order to perform their duties in an efficient and accurate manner. This training may be provided by Contractor personnel. Golf Management Agreement Page 9 of 20 3. Modifications. Any other changes, additions, or modifications applicable to the City owned cashiering system would need mutual agreement as to payment responsibility. B. Receipting. Contractor and/or subcontractor shall collect for, and on behalf of, the City all gross revenue, including but not limited to golf course greens fees, driving range fees collected under the Lease, golf club and cart rentals, golf course tournament fees, non-sufficient fund check return fees, and all other fees at the Golf Club in strict accordance with the schedule of fees established by the City, unless other instructions are given in writing to the Contractor. Netting of transactions is prohibited. All revenue collected from transactions under this agreement, with the exception of lessons, must be processed through the Point of Sale System and deposited as provided in subsection 10(C). Contractor may process lesson revenue through the Point of Sale System in which case the revenue must be receipted and deposited as provided in subsection 10(C) and thereafter reconciled and paid to Contractor as appropriate. All course gross revenue must be recorded, collected and deposited in a manner which will dispense a dated receipt to be given to each customer. C. Deposits. All deposits must be prepared in a timely manner defined as 12 hour ahead of scheduled pick-up and composition of deposit shall remain intact and a clear audit trail maintained. The City will provide and pay for courier service. Any delays causing additional "premise charges" will be paid by Contractor. All deposits will be made into a single account established for the Golf Club. Settlements and appropriate disbursements will be made from this account. Contractor shall be responsible for any loss or theft of City funds while the same are in its possession or control. Contractor shall provide City with a fidelity bond and a performance bond as required in this Agreement. Contractor and any subcontractor shall comply with accounting procedures as may be required by the City to comply with state laws, regulations and audit review requirements. D. Reports. Contractor shall provide to the City daily reports of golf activity and receipts in a format to be provided by the Director and Finance Officer, and shall structure their accounting system in a method satisfactory and acceptable to the City. The reports will be forwarded to the Director and must be received by the 2nd business day following the day of activity, excluding Fridays, Saturdays and Sundays which will be due on Tuesdays. The reports must agree with the corresponding deposit for the day. In addition, the Contractor shall submit a copy of its previous year's operating statement by March 31st to demonstrate Contractor's financial ability to maintain operations under this Agreement. E. Audits. All revenue and fees collected at the Golf Club are City revenues and subject to audit by the State Auditor, City Internal Auditor, or City hired Certified Public Accountants. Contractor shall permit the City, from time to time as the City deems necessary, through its designated representatives, to inspect and audit in Bremerton, Washington, at any reasonable time, all pertinent books and records of Contractor and any other person or entity that has performed work in connection with or related to Contractor's services under this Agreement to verify the accuracy of accounting records and shall supply the City with, or shall permit the City to make a copy of any books and records and any portion thereof, upon the City's request. Golf Management Agreement Page 10 of20 Contractor shall ensure that such inspection, audit and copying right of the City is a condition of any contract, agreement or other arrangement under which any other person or entity is permitted to perform work in connection with or related to Contractor's services under this Agreement. The Contractor shall take immediate corrective action on all prior, current or future internal control weaknesses as directed by the City. F. Taxes. Pursuant to the City's bond resolutions on the Golf Club facilities, the Contractor will remit to the City all gross revenues collected. Sales tax from Contractor's activities remitted to the City will be held by the City and will be returned to the Contractor weekly or as otherwise agreed. City shall retain and remit sales taxes on revenues from green fees sales. As an independent contractor, the Contractor acknowledges that it is responsible for payment of any local, state, including business and occupation tax, or federal taxes or fees with respect to the Contractor's business, including sales tax, for its activities. The Contractor shall pay any and all applicable taxes when due. G. Credit Card Costs and Fees. Contractor shall be responsible for all credit card costs and related fees incurred for Contractor's business pursuant to this agreement (ie. lessons) and the City shall be responsible for credit card costs and related fees incurred for the City's business pursuant to this agreement (ie. greens fees). SECTION 11. MAINTENANCE OF RECORDS. The Contractor shall keep and maintain on a current basis all books and records, including the operating accounts, to support its management and operations of the Premises under this Agreement. The City or its authorized representative shall have the authority to inspect, audit, and copy, upon reasonable notice and from time to time, any records of the Contractor regarding its billings, payments or work under this Agreement. Contractor shall retain these records for inspection, audit, and copying for at least three (3) years from the date of completion or termination of this Agreement, or as otherwise required by the Washington Secretary of State General Records Retention Schedule for all Local Government Agencies in Washington State. Contractor shall, at all times, provide the City with all records for the prior three (3) years that relate to the financial matters of the Premises managed by Contractor under this Agreement. SECTION 12. AUDIT OF PAYMENTS. The City, either directly or through a designated representative, may audit the records of the Contractor at any time during the three (3) year period established by Section 11, MAINTENANCE OF RECORDS. If an audit discloses that payments to the Contractor under Section 7, COMPENSATION, were in excess of the amount to which the Contractor was entitled, or that the payments to the City were less than the amount to which the City was entitled, then Contractor shall repay the amount of the excess or deficiency to the City. If an audit discloses that payments to the City under Section 7, COMPENSATION, were in excess of the amount to which the City was entitled, or that payments to the Contractor were less than the amount to which the Contractor was entitled, then the City shall repay the amount of the excess or deficiency to the Contractor. Golf Management Agreement Page 11 of20 SECTION 13. ASSIGNMENT. Contractor shall not either voluntarily or by operation of law assign, transfer, mortgage, pledge, hypothecate, or encumber this contract or any interest therein and shall not subcontract the obligations under this Agreement, or any part thereof, or allow any person (employees, agents, servants, and invitees of Contractor excepted) to use the Golf Club Facilities, or any portion thereof, without the prior written consent of the City. Any such assignment, subcontracting or use without compliance with the terms of this paragraph shall be void and shall constitute a default under the terms of this Contract. If Contractor is a corporation, any transfer of this Contract from Contractor by merger, consolidation, or liquidation, or any change in the ownership or power to vote in a majority of the outstanding voting stock of Contractor shall constitute an assignment for purposes of this paragraph. Any consent to one assignment, subcontracting, or use by any other person shall not be deemed to be a consent to any subsequent assignment, subcontracting, or use by another person. Consent to any such assignment, subcontracting or use shall in no way relieve Contractor of any liability under this Agreement. Assignment by Contractor to a financial institution holding a security interest in this Agreement shall not be considered to be a violation of the consent requirements of this Agreement. Consent for any subsequent assignments by said financial institution will not be unreasonably withheld; however, any assignee must have experience and be knowledgeable in golf and food and beverage operations. SECTION 14. TERMINATION. This Contract will terminate upon the happening of any of the following events: A. Upon its normal termination if not renewed. B. Upon termination ofthe Lease and/or Food and Beverage Agreement. C. Upon the death of both of Contractor's Principals. D. By mutual written agreement. E. Breach of this Agreement as set forth in Section 15 below. F. Major damage or destruction of the golf Club property, structures or equipment that is the subject of this Agreement, when the City decides not to rebuild, and that damage or destruction will prevent Contractor from substantially performing their obligation under this Agreement. SECTION 15. BREACH. A. In the event that either party claims that the other is in a substantial breach of any of the provisions of this Contract, notice of the breach shall be submitted to the party alleged to be in breach and the party in breach shall have thirty (30) days from receipt of the notice within which to correct any activity or conduct claimed by the other to have constituted a substantial Golf Management Agreement Page 12 of20 breach of this Contract. The notice shall identify the nature of the breach and the contract provisions violated. B. In the event that the party in breach shall fail to correct the activity claimed to constitute a substantial breach of this Contract within thirty days of receipt of the notice of breach, the party claiming breach may: 1. Issue a notice of termination; and/or 2. Seek judicial remedy or specific performance; and/or 3. Pursue any other remedy available at law or equity. C. The Contractor is subject to immediate termination upon written notice by City if: 1. Contractor violates any fiduciary duty to the City by misappropriating or not properly accounting for or mishandling City funds as determined by the City or Washington State Auditor; or 2. Contractor vacates or abandons the Golf Club facilities under Contractor's responsibility. D. Upon receipt of notice of termination by Contractor, which is issued by the City, the City shall have the right to: 1. Enter and take possession of the facilities; and/or 2. Bring suit for and collect all fees and portions of gross revenue or any other monies required to be paid to the City which shall have accrued to the time of termination of the Contractor's rights. E. Upon written notice of termination by the City, Contractor will have thirty (30) days to vacate the Premises unless the City elects to take immediate possession as set forth in paragraph D above. Termination shall be affected by serving a Notice of Termination by certified mail (return receipt requested) or by personal delivery upon the Contractor setting forth the manner in which the Contractor is in default. F. Neither the City nor the Contractor shall have breached this Contract by reason of the closing of all or a portion of the golf course facilities as set forth in Section 7(D) and (E). G. Examples of a breach by the Contractor which warrants termination, if not cured, shall include but not be limited to: 1. Misappropriation or mishandling of City funds. 2. Contractor makes any general assignment or general arrangement for the benefit of creditors or the filing by or against Contractor of a petition to have Contractor adjudicated as bankrupt, or a petition for reorganization or arrangement under any law relating to bankruptcy (unless, in the case of a petition filed against Contractor, the same is dismissed within sixty (60) days or the appointment of a trustee or a receiver to take possession of substantially all of Contractor's assets located at the Premises or of Contractor's interest in this Agreement, where possession is not restored to Contractor within thirty (30) days or the attachment, execution, or other judicial seizure of substantially all of Contractor's assets located Golf Management Agreement Page 13 of 20 at the Premises or of Contractor's interest in this Agreement where such seizure is not discharged within thirty (30) days. 3. Contractor assigns all or part of its interest in this Agreement without prior written consent of the City pursuant to Section 13. 4. Nonpayment of outstanding current liabilities within ninety (90) days and failure to pay Federal, State, and local taxes and license fees when due. 5. Continuing inattention or neglect of duties. 6. Suspension from the PGA resulting in a situation where neither principal is a member ofthe PGA for more than thirty (30) days. 7. Conviction of a felony or conviction of a non-felony crime of dishonesty, theft or deceit of either of the Principals. SECTION 16. PURCHASE OF CONTRACTORS MERCHANDISE. In the event the City takes over management of the Golf Club facilities, after expiration of this Agreement or earlier termination by the City, Contractor reserves the right, if it so elects at its discretion, to require City to purchase the Contractor's Pro shop and driving range merchandise and moveable furnishings identified in Exhibit A at Contractor's cost less depreciation mutually agreed upon. If there is no agreement, this amount shall be established by a mutually agreed upon independent appraiser. The City shall make payment within 90 days of expiration or termination, less any monies owing to the City under the terms of this Agreement, the Food and Beverage Agreement or under the terms of the Lease. Should Contractors simply abandon any items set forth above, they shall immediately become the property ofthe City. SECTION 17. INDEPENDENT CONTRACTOR. A. The Contractor is engaged as an independent contractor and will be responsible for any federal, state, and local taxes and fees applicable to payments hereunder. B. The Contractor, its subcontractors, and their employees, are not employees of the City and are not eligible for any benefits through the City, including without limitation federal social security, health benefits, workers' compensation, unemployment compensation, and retirement benefits. C. The parties agree and acknowledge that the Contractor is an independent contractor and not the agent or employee of the City of Bremerton, and that no liability shall attach to the City as a result of the acts or omissions of the Contractor, its agents or employees. D. The Contractor shall be responsible for withholding and paying all payroll taxes for any person hired by them to perform the duties they are required to perform under the terms of this agreement. They are also responsible for all taxes owed to any governmental agency as a result of the monies paid to them under the terms of this Agreement. Golf Management Agreement Page 14 of20 SECTION 18. INDEMNIFICATION, INSURANCE, BOND. A. Indemnification. 1. Contractor agrees to defend, indemnify and save harmless the City, its appointed and elected officers, employees and volunteers, from and against any and all liability, loss, cost, damage and expenses, including costs and attorney fees in defense thereof because of actions, claims or lawsuits for damages resulting from personal or bodily injury, including death at any time resulting there from, sustained or alleged to have been sustained by any person or persons and on account of damage to property, arising or alleged to have arisen directly or indirectly out of or in consequence of or the performance of this Agreement, whether such injuries to persons or damage to property is due to the willful or negligent acts or omissions of Contractor, their subcontractors or agents. This provision shall be inapplicable to the extent the City is judicially found solely negligent for such damage or injury. 2. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event ofliability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Contractor and the City, its officers, officials, employees and volunteers, the Contractor's liability hereunder shall be only to the extent of the Contractor's negligence. B. Insurance Requirements. 1. The Contractor shall procure and maintain for the duration of this Agreement, insurance against claims for injuries to persons or damage to property which may arise from, or in connection with, the performance of the work hereunder by the Contractor, its agents, representatives, employees or subcontractors. 2. The Contractor shall provide a Certificate of Insurance evidencing: a. Automobile Liability Insurance with no less than $1,000,000 combined single limit per accident for bodily injury and property damage; and b. Commercial General Liability Insurance written on an occurrence bases with limits no less than $1,000,000 combined single limit per occurrence and $2,000,000 aggregate for personal injury, bodily injury, and property damage. Coverage shall include but not be limited to: blanket contractual; products/completed operations; broad form property damage; liquor liability, and employer's liability. 3. Any payment of deductible or self insured retention shall be the sole responsibility of the Contractor. 4. The City, including its officials, employees, and volunteers, shall be named as an additional insured on the insurance policy, with respect to work performed by, or on behalf of, the Contractor and a copy of the endorsement naming the City as additional insured, approved by the City's Risk Manager, shall be attached to the Certificate of Insurance. 5. The Contractor's insurance shall contain a clause stating that coverage shall apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. 6. The Contractor's insurance shall be the primary and non-contributing insurance with respect to the City's insurance and the City shall be given thirty (30) days prior written notice of any cancellation, suspension or material change in coverage. Golf Management Agreement Page 15 of20 7. Acceptability of Insurers. Insurance is to be placed with an insurer with a Bests' rating of no less than A:XIII, or with an insurer acceptable to the City. 8. Subcontractors. Contractor shall include all subcontractors as insureds under its policies or shall furnish separate certificates for each subcontractor. All coverage for subcontractors shall be subject to all of the requirements stated herein. C. Bond. The Contractor shall continuously maintain at its expense an employee dishonesty bond covering collection of fees on the Premises for the benefit of the City. The bond shall be in an amount not less than SEVENTY-FIVE THOUSAND AND NO/IOO DOLLARS ($75,000.00). The Contractor must additionally provide broad form money and securities coverage both inside and outside the Premises in an amount not less than FIVE THOUSAND AND NO/I 00 DOLLARS ($5,000.00). D. Proof of Insurance. Proof of the above requirements must be provided to the City upon execution of this Agreement. The policies required herein shall provide not less than thirty (30) days prior written notice to the City of any cancellation, expiration, modification, or reduction in coverage or liability limits. SECTION 19. SUBCONTRACTING. The Contractor shall not subcontract its work under this Agreement, in whole or in part, without the written approval of the City. The City reserves the right to review and approve any subcontracts prior to execution to ensure compliance with the provisions of this Agreement. The Contractor shall require any approved subcontractor to agree, as to the portion subcontracted, to comply with all terms and conditions as specified in this Agreement. Notwithstanding City approval of a subcontractor, the Contractor shall remain obligated for full performance hereunder, and the City shall incur no obligation other than its obligations to the Contractor hereunder. Any subcontracts approved by the City shall be subject to and shall not extend any rights granted beyond those set forth in this Agreement to Contractor. Contractor agrees that if subcontractors are employed in the performance of this Agreement, Contractor and its subcontractors are subject to the requirements of the State of Washington, Workers' Compensation Laws. SECTION 20. CONDITION OF PREMISES. The Contractor has inspected and examined the Premises and all facilities and fixtures thereon and accepts the same in its present condition. The Contractor shall not make any alterations, changes, or additions to the Clubhouse or to any fixtures or equipment owned by the City without the written consent of the Director. The Contractor shall not commit, permit, or allow any nuisance, waste, or injury in, upon, or to the golf course, or to permit the use ofthe golf course for any illegal or immoral purpose. SECTION 21. NOTICE. Any notice provided for under this Agreement shall be sufficient ifin writing and delivered personally to the following addressee or deposited in the United States Mail, postage prepaid, certified mail, return receipt requested, addressed as follows, or to such other address as the receiving party hereafter shall specify in writing: Golf Management Agreement Page 16 of20 City: Director of Parks and Recreation City of Bremerton 345 6th Street, Suite 600 Bremerton, Washington 98337 Contractor: SECTION 22. PAYMENTS TO VENDORS AND SUBCONTRACTORS. The Contractor shall pay timely all suppliers, lessors, and contractors providing services, materials or equipment for carrying out its obligations under this Agreement. The Contractor shall not take or fail to take any action in a manner that causes the City or any materials that the Contractor provides hereunder to be subject to any claim or lien of any person without the City's prior written consent. SECTION 23. BUSINESS LICENSE. Contractor shall obtain a City of Bremerton business license as required by Chapter 5.02 of the Bremerton City Code prior to beginning work under this Agreement. SECTION 24. CONFIDENTIALITY OF RECORDS. The City will, to the extent allowed by law, keep all of Contractor's and subcontractor's financial cost information confidential, unless required to disclose the information as a result of the Washington Public Records Disclosure law, Ch. 42.56 RCW or by court order. SECTION 25. PRIOR CONTRACT EXTENSIONS SUPERSEDED AND TERMINATED. The prior agreement between the City and Contractor for these services had an expiration date of December 31, 2006 which has twice been extended pending negotiation of this agreement. The extensions were executed with the understanding that new terms may be negotiated for a new agreement beginning with the year 2007. Accordingly, this Agreement supersedes the terms and conditions of the fourth amendment extending the 2006 agreement executed on January 18, 2007 and the fifth amendment extending the 2006 agreement executed on or about April 2, 2007 to the extent this Agreement is inconsistent with the prior agreement and amendments and upon execution of this Agreement, said agreement and amendments shall terminate. SECTION 26. OTHER A. Costs and Attorney Fees: If, by reason of any default or breach on the part of either party in the performance of any of the provisions of this Agreement, a legal action is instituted, the losing party agrees to pay all reasonable costs and attorney fees in connection therewith. It is agreed that the venue of any legal action brought under the terms of this Agreement shall be in Kitsap County. Golf Management Agreement Page 17 of20 B. Construction. This Agreement shall be construed in accordance with the laws of the State of Washington. The provisions of this Agreement have been negotiated by the parties, and when interpreting the provisions of this Agreement, there shall be no presumption of draftsmanship for or against either party. C. Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision. D. Waiver. Failure to insist upon strict compliance with any terms, covenants or conditions of this Agreement shall not be deemed a waiver of such, nor shall any waiver or relinquishment of such right or power at any time be taken to be a waiver of any other breach. The City and the Contractor shall not be deemed to have waived any breach of this Agreement by the other party except by an express waiver in writing. An express written waiver as to one breach shall not be deemed a waiver of any other breach not expressly identified, even though the other breach is of the same nature as that waived. E. Amendment. The City and the Contractor may amend this Agreement at any time only by written amendment executed by the City and the Contractor. The City and the Contractor agree that this Agreement shall be amended at any time if, in the opinion of bond counsel to the City, such amendment is necessary to preserve the tax exempt status of interest on obligations of the City issued to finance the Golf Club. F. Entire Agreement. This Agreement contains the entire agreement between the parties with regards to the subject matter set forth herein. There are no other representations with regards to the subject matter, either orally or in writing. From January 1, 2007 until execution of this agreement, this agreement supersedes the prior agreement between the City and Contractor for these services which had an expiration date of December 31, 2006 and which has twice been extended by amendments on January 18, 2007 and on or about April 2, 2007 pending negotiation of a new agreement. Upon and following the execution of this Agreement, this agreement will replace the prior agreement in its entirety. G. Nondiscrimination. Contractor shall not discriminate in employment or services to the public on the basis of race, color, national origin, sex, religion, age, marital status, physical, mental or sensory disability except in an employment action based on a bona fide occupational qualification. H. Liens. The Contractor agrees that it shall pay, or cause to be paid, all costs and expenses for work done and materials delivered to the Premises and shall keep the Premises free and clear of all liens for work performed thereon. I. Remedies. Rights under this Agreement are cumulative; the failure to exercise on any occasion any right shall not operate to forfeit such right on another occasion. The use of one remedy shall not be taken to exclude or waive the right to use another. Golf Management Agreement Page 18 of20 J. Washington law and Forum. This Agreement shall be construed according to the law of the State of Washington. Any litigation between the City and the Contractor arising under this Agreement or out of work performed under this Agreement shall occur, if in the state courts, in the Kitsap County Court having jurisdiction thereof, and if in the federal courts, in the United States District Court for the Western District of Washington. ~B~ CARY BOZEMAN, Mayor ~ DATE: ot- /3 -0'7 ATTEST: (') n.L~)@/n.J.tt. ~ Paula Johnston, City Cler APPROYED AS TO FORM: OYICR, City Attorne Golf Management Agreement Page 19 of20 EXHIBIT A Pro Shop Moveable Furnishines 1 Slotwall 2 Driver Racks 3 Putter Racks 6 Clothes Racks 2 Full Set Racks 1 4-Set Rack 1 Nesting Table 1 TV 1 Hat Rack 1 Range Picker 1 Range Dispenser 1 Washer and Dryer 1 Range Cart 1 Janitorial Supplies 1 Laminator 2 Fax Machines 4 Tables for Golf Balls Christmas and other seasonal decorations Cones for Shotgun Starts 9 File Cabinets 1 Fire Pit and Chairs R:\Legal\Legal\Files\Current Active Files\Gold Mountain\GolfManagement Agreement - FINAL.doc Golf Management Agreement Page 20 of 20