Bid Selection Task Force
January 25, 2006
Page 2
It was suggested that potential bidders be invited to visit Sun City Texas for a preliminary review of the facilities prior to distributing the RFP. Some of the companies may be interested in also managing the food and beverage facilities at SCT. Mr. DeLozier indicated that most probably would be interested in managing both the golf and the food/beverage facilities.
Other topics related to the RFP and management contract were discussed. These included the type of fee structure to be considered, length of the contract and future addition of a third golf course in SCT. Mr. DeLozier stated that most contracts are on a fixed fee basis with 5 years being the typical length of the contract. Some contracts may include an incentive in addition to the fixed fee. These incentives should be tied to specific performance characteristics. Mr. DeLozier indicated that a typical fee for management of golf operations is 3-5% of gross revenue. The contract should have a termination clause based on non-performance. It was suggested that potential bidders be asked about pending litigation at courses they manage.
Proposed addition of the third golf course should be part of the RFP and subsequent contract negotiations. Management companies can develop their bids for the additional course based on the standards specified for the current courses.
There was some discussion of golf revenue and how revenue is collected and distributed. All revenue is collected by the Community Association and fees/expenses disbursed by the CA. It was suggested that golf revenue be managed separate from general operations. Mr. McDaniel indicated that he thought this could be managed appropriately. It also was suggested that a model be developed to demonstrate the advantages of the annual pass as the preferred method of payment.
The discussion returned to the specifications required for the RFP. Mr. DeLozier reiterated that the standards are critical and need to be very specific including such things as the frequency with which greens and fairways are mowed, equipment acquisition, availability and maintenance and personnel qualifications. Also the RFP needs to set some method for restricting the number of complimentary rounds allowed. Standards for all of these factors need to be specifically stated but allow for some flexibility. It is critical that a mechanism for monitoring performance be established so that inconsistent performance or non-performance can be documented and addressed. It was suggested that companies being considered be asked to provide the names of courses they manage and that Task Force members make an effort to play those courses to assess conditions.
Future modification of the existing courses was discussed briefly. Modifications might be implemented at some time in the future in order to reduce costs, to facilitate play for older or handicapped golfers or to enhance the golf experience. It was suggested that a list of future capital improvements be developed but that these not be included in the original RFP.
Mr. DeLozier suggested that, in order to develop a trust relationship, the final selection process be fully transparent in sharing current budget costs/expenses with the bidders. Some Task Force members were reluctant to share such specific information as this might not be in the best interest of SCT. A question was raised whether it might be feasible to retain management of the golf operations within the Community Association rather than outsourcing to a management company. This was recognized as a possibility and may be considered as an option after specifications and standards are developed.
It was agreed that the Task Force would meet again with Mr. DeLozier on February 15, 2006 at 8:30AM. The location of the meeting will be determined later.