DATE: June 18, 2025
TO: Honorable Mayor and City Councilmembers
FROM: Public Works Department
TITLE: AMENDMENT 2 TO THE GOLF COURSE MANAGEMENT & OPERATION AGREEMENT WITH OCEANSIDE GOLF, LLC TO EXTEND THE TERM ON A MONTH-TO-MONTH BASIS
RECOMMENDATION
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Staff recommends that the City Council approve Amendment 2 to the Golf Course Management & Operation Agreement with Oceanside Golf, LLC to extend the term of the agreement on a month-to-month basis until terminated by either party with 90-days prior written notice; and authorize the City Manager to execute the Amendment upon receipt of all supporting documents.
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BACKGROUND AND ANALYSIS
On June 23, 2010, the City and Oceanside Golf, LLC (OGL) entered into the Golf Course Management & Operation Agreement for OGL to manage the Oceanside Municipal Golf Course (OMGC) located at 825 Douglas Drive, Oceanside (“Premises”). The agreement was amended on June 17, 2020 by Amendment No. 1 (collectively, the “Agreement”).
The Agreement provides OGL a fixed annual management fee in the amount of $120,000 payable monthly and a percentage management fee of five percent (5%) of the gross revenues in excess of approximately $2,900,000 as of FY 2024-25, payable annually, if applicable. The Agreement expires June 30, 2025 with no options to extend.
At this time, the City and OGL are desirous of extending the term of the Agreement on a month-to-month basis to be terminable with a 90-day notice of termination by either party. It is the City’s desire to issue a Request for Proposal (“RFP”) for operation or lease of the Premises. The City anticipates the RFP being issued within the next six months. With additional time needed to proceed with the RFP process, an extension of the term of the Agreement is required. The Amendment adjusts the fixed management fee to a monthly fixed management fee of $10,000 per month, with proration required for any partial months of the extended month-to-month term.
OMGC generated $619,573 in net operating income in FY 2023-24 and is projected to end FY 2024-25 with approximately $679,163 in net operating income. The rounds for FY 2023-24 were 55,265 and projected to end FY 2024-25 with approximately 61,828 in rounds.
Major capital improvement projects were completed between January 2024 - November 2024, including replacement of the course irrigation system, improvements to numerous tee-boxes and bunkers, and a major overhaul of the clubhouse. During the installation of these improvements, a portion of OMGC was not available for play by the public; therefore, this had a direct impact on the revenue and rounds for the course. There has been a strong recovery in revenue and rounds played at OMGC with notable increases shown in the last half of FY 2024-25.
FISCAL IMPACT
The fixed management fee in the amount of $10,000 per month is funded from monthly revenue generated at OMGC. OGL manages and handles the course operations, including management of all revenues and expenses generated from the golf course, with oversight by City staff. OGL is required to work within the approved annual budget for OMGC operations and all deviations require approval. The Amendment is not expected to have any fiscal impact on total revenue during the extended, month-to-month term.
COMMISSION OR COMMITTEE REPORT
Does not apply.
CITY ATTORNEY’S ANALYSIS
The referenced documents have been reviewed by the City Attorney and approved as to form.
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Prepared by: Kimberly Duffin, Senior Property Agent
Reviewed by: Hamid Bahadori, Public Works Director
Submitted by: Jonathan Borrego, City Manager
ATTACHMENTS:
1. Staff Report
2. Amendment 2