Are you still part of the Burholme Park organization?
I no longer hold a position or an officer, but the meetings I attend. And where they're held is only 98 2/12/08 - PARKS - BILLS 080078 and 080084 a block from where I live, so I generally go to the meetings on the second Thursday of the month.
How many members? The average attendance at a meeting would be 50 to 70 depending upon an issue, and if it's an issue like the Burholme Park, it could go to a hundred.
In an interest to respect and honor the schedules of testifiers on this particular bill, we're going to do the following: We're going to bring this hearing to a close, go into a public meeting, move this bill out of Committee, vote on this bill up or down, move it out of Committee, then go back to a public 99 2/12/08 - PARKS - BILLS 080078 and 080084 hearing to take care of our second order of business. So with that said, this concludes our public hearing. We are now going to go into a public meeting. I will ask Councilmember Frank DiCicco to please make a motion on Bill 9 No. 080084. And we want to ask or request that there be a suspension of the rules. COUNCILMAN DiCICCO: Thank you, Madam Chair. I move that Bill No. 080084 be reported out of this Committee with a favorable recommendation -- is there amendments? (Yes.) COUNCILMAN DiCICCO: I'm sorry. I will rephrase that. I move that the amendments to Bill No. 080084 be approved. (Duly seconded.)
The amendments have been moved and seconded. All in favor say aye. 100 2/12/08 - PARKS - BILLS 080078 and 080084 (Aye.)
Therefore, the amendments to Bill No. 080084 have been approved for consideration. We will now ask for a motion on the bill as amended, Bill No. 080084. COUNCILMAN DiCICCO: Thank you, Madam Chair. I move that Bill No. 080084 as amended be reported out of this Committee with a favorable recommendation and a further recommendation that the rules of Council be suspended so as to permit first reading in our next session of City Council. (Duly seconded.)
This bill 21 has been moved and properly seconded. All in favor say aye. (Aye.)
All opposed? 101 2/12/08 - PARKS - BILLS 080078 and 080084 (No response.)
Therefore, Bill No. 080084 as amended will be reported out of this Committee with a favorable recommendation and further moved that the rules of Council be suspended so as to permit first reading at the next scheduled session of Philadelphia City Council. We thank you all here for this bill number. We thank you for your attendance and your presence. We will now move back into a public meeting, and I will ask our Clerk, Joe Meade, to read the title of Bill No. 17 080078.
An ordinance 19 authorizing the President of the Fairmount Park Commission, the Executive Director of Fairmount Park and the Procurement Commissioner, on behalf of the City of Philadelphia, to enter into a Concession Agreement with Billy Casper Golf, LLC, under which Billy Casper Golf 102 2/12/08 - PARKS - BILLS 080078 and 080084 LLC, would improve, operate, manage and maintain four 18-hole golf courses and one sports center under the jurisdiction of the Fairmount Park Commission, including Olde Course and Karakung Course at Cobb's Creek Golf Club, Franklin D. Roosevelt Golf Course, John D. Byrne Golf Course and the City Line Sports Center; all under certain terms and conditions.
We thank you very, very much. If we could please ask the leadership, the Executive Director of Fairmount Park, to please come forward, Mark A. Focht, and provide testimony on this bill. (Mr. Focht approached the witness table.)
Let me start off first by saying thank you very, very much for the briefing last Thursday.
It was quite informative and gave us an 103 2/12/08 - PARKS - BILLS 080078 and 080084 opportunity to at least hear what lies before us and discuss any potential wrinkles that we're able to figure out today.
It was our pleasure. Thank you. And, again, good afternoon, Chairwoman Reynolds Brown, Vice-Chair Jones, Committee members. I'm Mark Focht, Executive Director of Fairmount Park. On my left is Barry Bessler, the Chief of Staff for Fairmount Park. On my right is Doug Kubinski, Director of Properties and Concessions Management for Fairmount Park. We appear before you today on behalf of the Fairmount Park Commission in support of Council Bill 080078 authorizing the City of Philadelphia, through the Procurement Department and Fairmount Park Commission, to enter into a long-term Concession Agreement with Billy Casper Golf, LLC, to improve, operate, manage and maintain the golf courses specified in this bill. Golf facilities under the 104 2/12/08 - PARKS - BILLS 080078 and 080084 jurisdiction of the Fairmount Park Commission have been operated through private concession agreements since 1985. Improvement in our approach to management of the golf facilities is a significant recommendation of the Fairmount Park Strategic Plan, of which you are very aware and supportive of, and Park staff has been working diligently for over a year to address this recommendation through the City's required request for proposal, or RFP, process. Prior to issuing the RFP, Fairmount Park staff conducted research on best practices used in other municipalities with multiple golf courses. The RFP was drafted and reviewed by an array of City agencies, including the Mayor's Office, Managing Director's Office, Finance, Budget, Procurement, City Solicitor, Health, Recreation, Minority Business Enterprise Council and Fairmount Park staff. We met in very large meeting rooms to 105 2/12/08 - PARKS - BILLS 080078 and 080084 accommodate everyone's interest. The RFP was publicly advertised, and golf management companies from across the country were directly solicited. An RFP selection committee was formed, comprised of representatives of many of these same City agencies. In addition to close scrutiny of each proposal submitted in response to the RFP, the committee conducted interviews with each respondent and reviewed references, financial data and planning strategies. Ultimately, Billy Casper Golf, LLC of Vienna, Virginia was selected for the concession agreement. Billy Casper Golf has an 18-year history as a management golf company, including experience managing more than 50 municipal golf courses throughout the United States. Their mission is solidly based in golf operations, and they have a national reputation as a leader in facility management and maintenance, marketing, 106 2/12/08 - PARKS - BILLS 080078 and 080084 agronomy and customer service. Their references, which include multiple public course arrangements in Cook County, Illinois, outside of Chicago, West Chester, New York and Cincinnati, Ohio, are impeccable. The public golf industry has become increasingly competitive and in order for the City's courses to be successful, improvements must be made to both the condition and the management of the courses. Therefore, the business terms of this Concession Agreement are aimed at improving the courses so they can operate at their full potential, serving all users. 5 million in payments and capital improvements to the courses, including a $350,000 investment in the first year of the agreement. The golf facilities will also benefit from an aggressive revenue-sharing structure. 107 2/12/08 - PARKS - BILLS 080078 and 080084 The more revenue that is generated at the courses, the more money will be available for course improvements. Along with annual savings to the Park from no longer operating the facilities as we have for the last two and a half years, the positive financial results from this agreement exceed $8 million over ten years, and the conditions of the courses will improve. We are also confident that increased use of the golf facilities resulting from capital investment, improved conditions and aggressive marketing will drive that amount even higher.
Several issues were raised when we briefed members of the Council and this Committee last week on the Concession Agreement, and I would like to address them directly. The first issue involved maintenance of the courses, particularly along the perimeters. This Concession Agreement obligates Billy Casper Golf 108 2/12/08 - PARKS - BILLS 080078 and 080084 full responsibility and expense for all care of the golf facilities. This care and maintenance extends beyond the actual courses to the perimeters of the facilities and includes turf and tree maintenance and snow removal, and seeks to establish good working relations with neighborhood residents. 2 of Exhibit B of the proposed Concession Agreement. The next issue involved outreach to schools in the vicinities of each course. Fairmount Park golf courses have had a long history of providing high schools, PAL centers and summer camps with golf opportunities. In addition to improvement to the condition and management of the golf facilities, Billy Casper Golf is contractually committed to expand and enhance youth golf opportunities, especially for those 109 2/12/08 - PARKS - BILLS 080078 and 080084 schools that may not currently use the facilities. And based upon our conversation last week, an amendment to Bill 080078 will specifically require Billy Casper Golf to provide to Fairmount Park and City Council a school outreach plan by June 1st of this year for engaging local schools in the sport of golf, as well as programming and seasonal employment opportunities available at the courses. Again, this plan will be submitted to Fairmount Park and City Council by June 1st of this year. The plan will then be implemented beginning with the 2008-'09 school year. In addition, Fairmount Park staff will also investigate the potential throughout the City for increased public golf programs with the School District of Philadelphia. The third item that was raised in our meeting was a possible future use of our golf facilities for tournament play. Fairmount Park's golf facilities, specifically Cobbs Creek or especially 110 2/12/08 - PARKS - BILLS 080078 and 080084 Cobbs Creek Golf Course, have hosted many local and regional tournaments over the years. The idea of hosting a more national golf tournament is appealing and has been discussed with our partners at the Philadelphia Sports Congress, on whose Board I serve, and with our prior management operators. While there are some obvious challenges of size and space at our courses, particularly Cobbs Creek, Billy Casper Golf has experience and knowledge to pursue such an undertaking, having renovated other courses in their portfolio for tournament play. To be clear, such a national event would require significant capital investment to bring the Cobbs Creek Golf Course up to an appropriate standard for such an event, but we have already discussed this with Billy Casper Golf. The fourth item from our meeting last week involved a request for periodic reports on the status of golf operations. Billy Casper has agreed to 111 2/12/08 - PARKS - BILLS 080078 and 080084 an amendment to the Concession Agreement which will require that they provide to Fairmount Park and City Council a, quote/unquote, "State of the Courses" report every two years on the anniversary date of the Concession Agreement. This document will report on provisions of the Concession Agreement, including, but obviously not limited to, course conditions, the financial performance, special activities, compliance with the employment opportunity plan and school outreach and engagement. The final issue that we discussed last week was the Equal Opportunity Plan, or EOP, its monitoring and enforcement. As I stated at our meeting, the obligation to monitor and enforce the EOP rests with us at Fairmount Park, as does any provision of any of our legal agreements.
I and Park staff take this role very seriously and will monitor this Concession Agreement to ensure compliance with all of its 112 2/12/08 - PARKS - BILLS 080078 and 080084 provisions, including the EOP, throughout the term of the agreement. However, in response to concerns heard from this Committee, additionally, Billy Casper's EOP, Equal Opportunity Plan, Exhibit F, Section 4(D)4 has been amended to specifically make non-compliance with the EOP an event of default under the Concession Agreement. In order to implement the above, we request that this Committee amend Ordinance No. 080087 by replacing the prior version of Exhibit 1 with a version we forwarded to the Committee members yesterday and which was just passed out to you. 7 of the Concession Agreement to require Billy Casper Golf to submit to Fairmount Park and City Council by June 1, 2008 a plan of outreach and engagement to local schools surrounding the four courses to 113 2/12/08 - PARKS - BILLS 080078 and 080084 be implemented at the beginning of the 2008-'09 school year. No. 9 of the Concession Agreement to require Billy Casper Golf to provide to Fairmount Park and City Council a "State of the Courses" report every two years on the anniversary date of the Concession Agreement. And, finally, 3, amend Billy Casper's Equal Opportunity Plan, Exhibit F, Section 4(D)4 to specifically make non-compliance with the Equal Opportunity Plan an event of default under the Concession Agreement. We are confident that this new Concession Agreement with Billy Casper Golf Management promises a bright future for the City golf courses. The Concession Agreement before you today was approved unanimously by the Fairmount Park Commission in November 2007. I, therefore, appear before you today to pledge the strong support of the 114 2/12/08 - PARKS - BILLS 080078 and 080084 Fairmount Park Commission and staff for Bill 080078. I would also request of this Committee a suspension of the rules for consideration at the next session of City Council. And I would like to thank you for your time, and I would be very pleased to answer any questions.
Any other testimony from other members of the panel there before we move to questions?
Very well. Councilman Frank DiCicco. COUNCILMAN DiCICCO: Thank you, Madam Chair, and good afternoon, almost good evening. I was not able to make the briefing. I apologize for that. I really wanted to go there and hear what you had to say. I actually started playing golf a few years ago. Let me rephrase that. I bought a set of golf clubs, and I hope 115 2/12/08 - PARKS - BILLS 080078 and 080084 that I'm not embarrassing the company whose logo is on those clubs. But in any event, I live in South Philadelphia and FDR, which is more commonly known as The Lakes, has been a place that I have frequented from a very young age, and more recently since I took up the game of golf I had the opportunity to go down there a few times. I don't know how to compare that with the other three golf courses, but rumor has it that it's probably the worst of the four, and a lot of it has to do with the flood tides and all those things. I was not aware until several months ago when I was down there on a very hot day and it was very dusty, there's no irrigation system down there, other than when the river exceeds high tide and the ground gets saturated and you have to wait a few days for it to recede and then presume to then resume playing golf or whatever. I know it's an expensive 116 2/12/08 - PARKS - BILLS 080078 and 080084 ordeal, irrigation. I can't imagine what it would cost. Is there any consideration long term? I know there are other improvements that need to be made, and that may not be the priority, but I just was curious if that's -- and it's not a deal-breaker. I'm not putting you on the witness stand as a deal-breaker. I'm just kind of curious. The interesting thing -- and I suspect this may happen at the other courses as well -- when I first started going to the course -- again, I was a kid, I played on the fields but never on the golf course -- I was surprised at the number of people who play golf, number one, and who are from the area or even from South Jersey who maybe were former South Philadelphians who come back on a daily basis. It's a social gathering place in addition to the game of golf, which pretty much is what golf is really all about. And I was just kind of dreaming one day about if that place was 117 2/12/08 - PARKS - BILLS 080078 and 080084 ever to be given some sort of a really upgrade, improvements and maybe a clubhouse kind of an environment, I think there's a real potential there. But, again, it takes money, and I was just kind of curious of what -- and I'm not discounting the other courses. I really don't know anything about them. That's kind of in my neighborhood, so I was just concerned and have some questions about that.
Certainly, Councilman. The issue of irrigation system at all of our courses is a very significant one for the long-term sustainability of the courses, and as I said in my testimony, increasing the rounds of play to increase more revenue, which, through our revenue-sharing, will funnel more improvements back into the courses. So you are correct, it is an expensive item, but we can probably, in the case of FDR, no longer rely on Mother 118 2/12/08 - PARKS - BILLS 080078 and 080084 Nature's irrigation down there when they flood the courses, particularly that one, as you know. So putting in irrigation in all four of our courses will be one of our first issues of priority for capital improvements in our conversations with Billy Casper. As I testified, they will be making $350,000 worth of improvements in the first year of the contract alone. We have not yet sat with them to determine exactly how that will be allocated over the four courses and the sports center and what exactly will be done, but I would give you my assurance that irrigation is high on that list for all the courses. COUNCILMAN DiCICCO: This might be late in the game, no pun intended, but I was wondering if -- and I know a lot of work went into this agreement from all parties -- if there was an opportunity to tweak some of the numbers as it relates to what your contribution in regards to 119 2/12/08 - PARKS - BILLS 080078 and 080084 the contract was that will enable you to have more money for capital so you can get the capital stuff done sooner. Because from a business standpoint, the quicker you get that done, the likelihood is you're going to increase participation. But I don't want to rewrite this. I'm just thinking out loud.
The financial arrangements in the agreement have been the results of several months actually of negotiations. These were not the numbers that were in the original RFP, and, frankly, most of the respondents to the original RFP, which were, frankly, more aggressive financially for the benefit of the courses, the operators -- all proposers, I should say, came back to us and basically said we were a little crazy in thinking, based upon the condition of our courses now, how much money the rounds of play could generate that could then be plowed back into the courses. 120 2/12/08 - PARKS - BILLS 080078 and 080084 And so there's been a very delicate balance in wanting to make sure -- we have a long history of these courses, 5 years. They've been operated through a 6 string of private contracts, private 7 concession agreements, each of which at 8 some point in time have failed for 9 financial reasons, one or the other. So 10 going into this, that's why all those 11 City operating departments were involved, 12 with Budget and Finance and everyone, to 13 try and figure out what's the best 14 financial agreement for both parties, for 15 the City and for the operator. Because, 16 clearly, if we want a private operator to 17 operate the courses, we want them to be 18 successful. 19 Billy Casper has a great 20 history in this, so I think the financial 21 package that we're at is probably the 22 best we could do in this marketplace now considering the conditions of our courses. COUNCILMAN DiCICCO: Is there 121 2/12/08 - PARKS - BILLS 080078 and 080084 any opportunity -- I tried to get through it as quickly as I could. Is there any opportunity to revisit the financial considerations in a year or two that may make some of the business sense that I just talked about? If there was some further relief to the Billy Casper organization to say, look, we had committed to X, but if we get a little bit of relief here, we will plow additional money into the capital. We want it to work. I mean, everybody wants it to work. Is there any language in that document that --
That's addressed through a progressive revenue-sharing agreement that has certain thresholds, that the more money that they achieve at the courses through a series of thresholds, the more comes back into the courses. So it's in their best interest to meet those thresholds obviously from a business perspective, but also for us to help them reach those to get more money 122 2/12/08 - PARKS - BILLS 080078 and 080084 back into the courses. COUNCILMAN DiCICCO: Thank you.
Thank you. COUNCILMAN DiCICCO: No further questions. Thank you very much.
You're welcome, Councilman DiCicco. Councilwoman Maria Quinones.
You mentioned that your initial proposal, folks came back to you and said it was unrealistic. When we allowed to change the bid, did we send that back out nationally?
Yes. Working with Procurement then, we revised some of the terms and conditions of the RFP, and though it was not a formal reissue, it was sent back out to all the folks who had indicated interest in the project by coming to the pre-proposal meeting, going on the tours of the courses, basically working with us through the whole process. They got the information back, 123 2/12/08 - PARKS - BILLS 080078 and 080084 yes.
So it was only the folks who had expressed interest. We didn't go back to a national pool based on the revised RFP to see if there were some other folks --
Okay. I noticed that the terms of this agreement, initially we started with five and we went up to ten, but in the community setting one, we set up for one year. Are we working with them? I had an opportunity to spend time yesterday with both of the community operators, one which is Juniata, which is physically in the district, and Impact Services, which the course is not in the district but the provider is in the district. Are we working with them to make sure that whatever goals that we put in -- I was trying to skim through the contract before coming down, and these things are legalese stuff. 124 2/12/08 - PARKS - BILLS 080078 and 080084 What are we doing to secure their success in that one year so that in a year from now -- and my concern specifically is the community groups making investments and then in a year from now, we're not renewing their leases.
Sure. I'll speak specifically first to Juniata, because the Juniata Golf Foundation sent us plans that they have developed to take a portion of the building that they store the golf carts in and do renovation in it to convert it into a clubhouse, which, as we discussed when we were out there a few months ago, burned to the ground a few years ago via an arson fire. So we reviewed those plans. We've already given them feedback on those plans. Those have been approved by staff. We'll work them any ways they need it to make sure that they can build that renovation to build the clubhouse so they have a real setting. 125 2/12/08 - PARKS - BILLS 080078 and 080084 That's just one example. That's really the first one that they've come to us with a request for that specific course, but I would look to the Chief of Staff, who has had regular interaction with both operators. It's only been a few weeks, but it's been great so far in our relationship with them.
This is Barry Bessler. I would just add that also at Juniata they've submitted some preliminary plans for expansion of tee boxes and some turf renovation projects, as well as some cart path replacement that is sorely needed at that particular facility. And both of those projects, in addition to the clubhouse renovations that Mark suggested, have been met by our staff with resounding approval, because we know that these are things that are very much necessary on the course and can only improve conditions, which drives 126 2/12/08 - PARKS - BILLS 080078 and 080084 rounds, and everybody is happy at that point.
Their revenue goals are pretty aggressive, because they always count on -- well, it counts on them sustaining the same type of revenue. How realistic is that?
Well, their revenue projections are based on, I think, the past five years of history that they've done. So they are very confident and ambitious that they can meet those goals. And allowing them to do the kind of improvements that they're talking about can only add to that. I would also say from Fairmount Park's standpoint that just after the first of the year, we committed to an extensive tree work contract of $75,000, I believe, for much-needed tree work at all of our courses as a way of showing our good faith to them for the enterprise that they were undertaking, that this is stuff that normally would fall to either 127 2/12/08 - PARKS - BILLS 080078 and 080084 a concession operator or a non-profit operator to be responsible for, and we took that on and said, This is something that we would like to do for you in exchange of you helping us with these contract arrangements.
Are there any trigger points where we're reviewing this to make sure that the revenues are being met? Because they're going to spend at a certain rate. I mean, other than the lease agreement and they're responsible -- because this is the first time they're doing this.
Right. They have a $1 per year non-profit lease arrangement with us, and the revenue projections that they made, if they're on target, is obviously in their best interest. If they're not, that's why we've entered into one-year agreements with both of these operators. If they feel after a certain period of time that they cannot do it financially, it gives 128 2/12/08 - PARKS - BILLS 080078 and 080084 them a bail-out, as well as us if we would seek to do something else with the properties.
I would also add, I think, to your question, there's no 7 specific trigger points. We don't have anything in our lease with them where we look at their financials on a monthly basis or a quarterly basis. The way the lease is drafted, it's annually. I think certainly we could do it. Particularly if you have a concern or we have a concern, we could look at their financials on a quarterly basis.
I want them to be successful, but I don't want to have the conversation in September when they're due up for renewal in October.
I was concerned after our briefing and that's why I scheduled those visits yesterday, and I want to make sure that we're being 129 2/12/08 - PARKS - BILLS 080078 and 080084 as proactive as possible, because unlike these other folks, they got one year to make it or break it. I have a vested interest that Juniata is successful. It's in a more challenging community because the demographics are changing. There's more vandalism and some other issues. So I'll ask Mr. Bessler to join me as we kind of look at some of those real challenges, because my goal is to make them successful. I just want to make sure that we're just not leaving them out there.
No. I agree, and they've been able to -- that group in particular has been able to garner a tremendous amount of community support and the support of other legislators and other community interest groups, if you will, to further their cause. So I really think that they will be successful, and we certainly hope that that's the case.
Thank you. 130 2/12/08 - PARKS - BILLS 080078 and 080084 What I have been struggling with trying to find here is the exhibit that stipulates that Philadelphia area public or charter schools adjacent to the golf courses will be involved with the Casper enterprise.
Councilwoman, what it is is, it's Exhibit B, Section 3.7, and what it requires is that, again, Billy Casper Golf submit to Fairmount Park and City Council by June 1st this outreach plan of engagement to City schools, both engaging them about the sport of golf, employment opportunities, health and fitness opportunities. So, again, the way it's structured, the way the amendment is structured, is, Billy Casper would produce a plan to submit to Fairmount Park and City Council by June 1st for our review for them to put in effect when schools commerce again this September, for school year '08-'09.
Okay. I'm 131 2/12/08 - PARKS - BILLS 080078 and 080084 going to need you to find out, is that in this document here? I need you to help me find out where it is.
I did some of the drafting on this and some of it is done kind of circuitously, especially the amendments, but if you look at the Concession Agreement, Section 16.07. So it would actually be 16.07(a). That's where we put in the provision that "Billy Casper Golf shall submit to Fairmount Park and Philadelphia City Council by June 1, 2008 a plan of outreach and engagement to local schools surrounding the four courses to be implemented at the beginning of the 2008-2009 school year for the duration of the Concession Agreement," and then "such plan shall 132 2/12/08 - PARKS - BILLS 080078 and 080084 include, but not be limited to, outreach to promote school golf programs, youth programs and seasonal employment." That's , Section 16.07.
That is actually stronger. The language here is actually stronger than that reflected in the letter, which speaks, I guess, somewhat generically. Okay. So that was one concern raised at the briefing. And then the other, in the body of the letter presented to us on February 11th, Item No. 3, it says, the Equal Opportunity Plan as an, quote, "event of default," end quote. What does that mean, "event of default"?
Sure. An event of default is when you default someone under the contract. So if Billy Casper in this case didn't comply with the terms of the EOP, then we could hold them in default of the contract. Hopefully we would never get to that point. We would 133 2/12/08 - PARKS - BILLS 080078 and 080084 never plan on getting to that point, but it's an item of recourse.
Okay. And so what is the recourse? What's the penalty? What is the clawback?
It's severing our contract with them. This was done in direct response to your question at our meeting last week, what is the claws, I think you asked us. This is that. What it is is that if Billy Casper is not in compliance with their EOP, it gives us, the City, the ability to sever our agreement with Billy Casper so they no 16 longer operate the courses and we move on. Then we figure out what to do. I don't know what the options would be, but you asked specifically for what is the remedy, if you will.
Does this document -- it stipulates that we will 134 2/12/08 - PARKS - BILLS 080078 and 080084 get a plan by June 1st. However, it does not provide either the Fairmount Park or City Council an opportunity to comment on the plan should we deem it incomplete or unacceptable.
I apologize. That was implicit. We felt that by them submitting the plan, the submitting is for both Fairmount Park and City Council to comment on the plan. We can make that very clear if you'd like. So they would submit the plan by June 1st for both of our comments for them to implement with the beginning of the school year.
Yes. For our comments and for them to respond to our comments.
I'm just leaning on limited experience now. If it's not written down, it doesn't exist.
And we can't presume that those seeking to do 135 2/12/08 - PARKS - BILLS 080078 and 080084 business with the City are going to do the right thing, because we've had too many examples where they say it and then you listen to what people say and then you watch what they do.
I certainly appreciate that. It was our full intention at Fairmount Park that if someone shares a report with us and, on this particular report, with City Council, we comment on it and we give those comments back, with the expectation that they act on those comments.
Can you briefly, very briefly, tell me where we are with Strawberry Fields, 33rd and Oxford? 136 2/12/08 - PARKS - BILLS 080078 and 080084
We are waiting on another response from Sintera on their most recent revision to their financial package. They came back to us about a month ago with a new financial package that was very, very different than what I had agreed to about ten months ago with the leadership there, and, frankly, it was so dramatic that it might have triggered rebidding the entire project. So we went back to them through the Law Department, through Larry Copeland, and said, This isn't acceptable to the City or the Park. They have come back verbally via telephone call to Larry Copeland from their attorney saying, Well, here's what we're thinking about. But we've not received anything in writing yet. So we're squarely waiting for Sintera Partners to give us a revised proposal, knowing that the one they gave us about a month ago was not acceptable to the City or the Park. 137 2/12/08 - PARKS - BILLS 080078 and 080084
The verbal discussion reflects something that could be acceptable?
It was very vague. It was very vague. What they did is, they acknowledged that what they had offered previously was not acceptable to us and that they understood that this may cause us to have to rebid the project and so they wanted to retrench and come back to us, and we're waiting.
Is there a timeline on the submission of the most recent?
We ask for them -- every time we speak with them, Councilman, we remind them that we want them in the ground this spring, but the ball is squarely in their court to get us information. Right now we don't have a deal.
This is a back and 138 2/12/08 - PARKS - BILLS 080078 and 080084 forth volley between --
Is there some point where we say, You haven't met your responsibilities and duties as it relates to this submission?
It could come to that, yes. I mean, we don't have a set -- we have not set a time for that. I mean, we've been trying to work with them in good faith. They were the successful bidder. They're a known quantity. And the plans they've done, the physical plans they've done, have been accepted by the Park Commission, had been vetted on any number of levels, and we consider the physical plans ready to go. The financial component of the deal is where we're still apart on.
Councilwoman Quinones Sanchez. 139 2/12/08 - PARKS - BILLS 080078 and 080084
Any other questions for these witnesses? (No response.)
Let me say thank you for working closely with my staff to ensure that concerns raised at the briefing were more than adequately addressed in the amendments. Thank you very much.
Anyone else to testify on this bill? Please. (Witness approached the witness table.)
Good afternoon. State your name for the record and offer your testimony.
Good afternoon. Thank you very much for this opportunity to testify this afternoon. My name is Lance Haver. I'm the Director of 140 2/12/08 - PARKS - BILLS 080078 and 080084 Consumer Affairs for the City of Philadelphia. I'm here to raise a very small point. I'm here to ask Council to consider requiring a discount for all City residents on golf fees. Historically we have not done that. The golf fees set by other contractors have been the same whether you're a City resident paying City taxes or you're a suburbanite not paying City taxes. While I recognize that golf fees are not a critical issue for most citizens, I believe that Philadelphia should price fees in accordance with what is done on other municipally owned courses. Other municipalities offer discounts to their residents. The reason is simple: Citizens of the municipality are already supporting the course with their tax dollars. The same is true in Philadelphia. Philadelphians, unlike others, have paid through their tax 141 2/12/08 - PARKS - BILLS 080078 and 080084 dollars for the courses and should be entitled to similar discounts that residents of other municipalities receive. Thank you.
Councilman DiCicco. COUNCILMAN DiCICCO: Thank you. Thank you, Madam Chair. Good afternoon, Mr. Haver.
Good afternoon. COUNCILMAN DiCICCO: You reference other municipalities. What is the structure in those other municipalities? Are they privately run? Are they municipally run?
With all due deference, I would say that this is a significant positive change, bringing in this firm to run the City's courses. This is a big step forward for us. Other courses have very different structures. Some are done privately, some are done municipally. 142 2/12/08 - PARKS - BILLS 080078 and 080084 The one thing that unites almost every municipally owned course in Pennsylvania is the discount for the residents. The management is sometimes contracted out, sometimes done through their own park system. COUNCILMAN DiCICCO: Look, I'm all for promoting Philadelphia and giving Philadelphians opportunities. I just don't know the business structure enough to know if it would make that much sense, because they do have an obligation to plow a certain amount of money back into the course. I think from their standpoint, once they get up and running, they may make a business decision to offer those discounts, because it may bring more people in or something like that. Again, on the one hand, I'm pro Philadelphia and buy Philadelphia and all that. I just don't know, since it's a whole new venture we're getting into, if we want to put another financial requirement, if you 143 2/12/08 - PARKS - BILLS 080078 and 080084 will, on the new folks that are coming in.
I would just point out, sometimes it's done during off -- COUNCILMAN DiCICCO: And I'm not arguing with you. I'm just trying to --
Sometimes it's done in the form of off-peak hours or twilight hours, that what has been set up in another places is non-prime time use of the courses, there's a discount for city residents. I'm sure that they will tell you -- if you're now golfing yourself, you must know -- there are certain times where it's harder to get on the greens than others, and there are ways of balancing that out. This is a very professional firm, has shown an excellent track record. COUNCILMAN DiCICCO: And, again, because of their professionalism and their desire obviously from a business standpoint to increase revenues 144 2/12/08 - PARKS - BILLS 080078 and 080084 by bringing more people to the facility, I think that would be a business decision that they would make, a conscious decision about offering some of those programs going forward.
I understand the wisdom of your statement. COUNCILMAN DiCICCO: But I appreciate your comments, though. Thank you.
It is a very, very interesting consideration, and I'll reserve my comment. We'll call on Councilwoman Maria Quinones Sanchez.
Well, I wasn't sure if Mark and them were prepared to respond. I'm sure if Lance was testifying, they knew this was coming.
Okay. So we'll have a friendly discussion about 145 2/12/08 - PARKS - BILLS 080078 and 080084 what is the financial impact, particularly if we're looking at off-peak hours.
Thank you. Again, Mark Focht, Fairmount Park. As Mr. Haver referenced, we have discussed this many times over the years in relation to our golf operations, and we have discussed this issue with Billy Casper Golf, and, in fact, their financial model in some of their other municipally run courses does offer different discounts for different users at different times of the day. However, my concern would be going into this particular arrangement -- Councilman, kind of along your train of thought -- kind of tying their hands financially before they really know the market, before they're in here operating these courses. Again, their business model in other urban courses outside Chicago, other places, Cincinnati, do have a tiered structure. 146 2/12/08 - PARKS - BILLS 080078 and 080084 I'm very concerned about the concept of pre-determining that that's what we should do with our courses, considering the very significant level of investment that needs to be made in our courses. And over the years when we've discussed this in the past with Mr. Haver and others, part of the lack of financial performance of our courses has been a number of stipulations or conditions that were put on the operator to address certain user groups. So I completely understand it and I'm philosophically in support of the concept, but I would prefer not to have it be part of the legislation. I would prefer it to be part of their business model, and perhaps in their reports back to the Park and Council every two years where they have to report on the business model and the financial performance of the courses, it could be a subject for evaluation, discussion as we move forward on these two-year intervals. 147 2/12/08 - PARKS - BILLS 080078 and 080084 Thank you.
And so how does the subject for evaluation or re-evaluation X number of years down the line differ from actually putting in the legislation that at whatever point you are at whatever revenue profit margin, you are then subject to discount for Philadelphia residents?
I guess part of the conversation, Councilwoman, would be not yet knowing what those points are, if it's a year, a year and a half, two years, if it's X millions of dollars. Again, they're not on the ground yet. They're not operating these courses. We know from operating them for the last year and a half that we lost a million dollars in the operations of these courses, as we shared with you last week, in operating all six courses at that time, not just these four, but that historically these courses have not performed financially. 148 2/12/08 - PARKS - BILLS 080078 and 080084 So, again, I would be concerned about setting a certain date in time or a certain financial threshold that would require that. Instead, and it's in the agreement, any changes of rates to the agreement have to be approved by the Executive Director of the Park. So Billy Casper Golf cannot just change the rates of the courses without us knowing it. It has to come back to staff. It has to be vetted, and at the end, I have to approve any changes to the rate structure. So as part of that continual evaluation, we can determine through their financial performance if we think it's appropriate, collectively we, all of us think it's appropriate to offer that rate structure, while at the same time knowing that we're not going to be taking away revenue that's so sorely needed to go back into the courses.
I guess 149 2/12/08 - PARKS - BILLS 080078 and 080084 my concern with this is that when we write these agreements, we either are very deliberate in specifying a spirit or we're not, and I happen to agree with Mr. Haver. Because we're subsidizing the maintenance of these fields and we are starting a new agreement, I prefer it to be the opposite, that we ask for some accommodations on non-peak, because then you're not infringing on their main revenue stream, but potentially creating a new revenue stream of people who would likely use the golf courses if they were more affordable. I mean, that has always been my concern with golf, and it was one of the discussions I had yesterday with Juniata, was the fact that it is not affordable. Someone like me should be able to afford it, and it's pretty expensive given the market, the marketplace. I mean, we know the profile of the person who is using it, and I look at this as an opportunity to create a new 150 2/12/08 - PARKS - BILLS 080078 and 080084 profile of someone, a Philadelphian who may not look at golf as an option, to look at golf, given the height behind the Tiger Woods and all those folks of the world. So since we are saying aggressively we want the schools to use it, if we're really serious about that, then we have to make it more affordable for the school to use it, because then they'd be doing outreach to a population who couldn't afford your traditional fees.
If I could address two points, please. One is, I think you referenced resources that we put into the courses. I just want to be very clear that under this Concession Agreement, the City has no obligation to put any money into these courses. So we're not actually subsidizing golf, because we're not spending anything. We have no staff at these courses. We have no operating or capital expenses into these courses. 151 2/12/08 - PARKS - BILLS 080078 and 080084 So, in fact --
But we have lost money, and those are taxpayer monies over the years.
But we've lost money during the time that we were managing them as a City entity, not as a for-profit business on a concession agreement. Also, the second thing with --
Correct, but they were doing it under a management agreement with the City, not a concession agreement, which is very different. The second component is, on the teams, I mean, there's a whole different structure for team play and school play that doesn't involve extensive fees. So the whole school issue -- and when they develop their school plan, they'll address it even more. The whole school issue is very separate from resident 152 2/12/08 - PARKS - BILLS 080078 and 080084 versus non-resident play. Again, I completely understand it. I just think that it is in Billy Casper's best interest to develop a multi-tiered fee structure to get as many people playing the golf as possible, because that improves their revenue via the revenue-sharing agreement we have. I'm just concerned about us dictating financial terms of an agreement which wasn't part of an RFP, wasn't part of a whole vetting process of selecting an operator for these courses, and that might tie their hands financially.
My question is, why wasn't it if it was an issue that Lance Haver brought up before?
It was chosen, again, through all the agencies that were involved in reviewing this to leave the financial operations of the course to be as wide open as possible to entice as many potential operators to bid on this -- and, again, we only got three, 153 2/12/08 - PARKS - BILLS 080078 and 080084 two national and one local. Fortunately, we're very pleased with the ones we got -- for them to structure the best business model to produce as much revenue back into these courses as possible. So it was discussed during the development of the RFP and it was specifically chosen not to put it in as a requirement because it felt that it was -- again, I keep going back to this phrase, but tying the hands of the operator.
Everyone that was on my list. I'm sorry. Procurement, Finance, Mayor's Office, MDO, Fairmount Park, Recreation, Health. Everyone that was on my list in developing the RFP.
Perhaps a way of balancing it would be to ask if we could re-examine it two years from now to give the new firm an opportunity to look at what's going on, and perhaps Council 154 2/12/08 - PARKS - BILLS 080078 and 080084 could just ask in two years to revisit the idea. If Billy Casper hasn't implemented themselves a discount for City residents, that City Council would then be able to enter that as a negotiation two years from now.
I'm going to take it a step further. When they come back on June 1st with the plan that accommodates and outreaches to the area schools, they would be well advised to indicate how those families of those kids that attend those schools have a chance to play golf at those courses.
Understood. And then in addition to that, if I may, Councilwoman, I would fully agree with Mr. Haver's suggestion that on the two-year anniversary -- again, our proposal is at the two-year anniversary of the commencement date. So if this Committee passes this, it is eventually passed by Council, we would hope to have an April 1st contract date so that Billy 155 2/12/08 - PARKS - BILLS 080078 and 080084 Casper would begin operating the golf courses on April 1st under this Concession Agreement, assuming it's signed by the Mayor and we execute the contract. So it would be April 1st of 2010, which be would the first two-year anniversary date and the first report is due in addition to your June 1st of 2008 that you just mentioned. So there would be an April 1st contract start, June 1st report, which could address the point you just made, and then an April 1st, 2010 full report, at which point we may find that Casper has already implemented the tiered structure, and if not, as we talked earlier, we jointly assess the report and come back to them with requirements.
Okay. Let me make sure I heard something. You said that somewhere in this document is a discussion or recommendation for a multi-tiered fee structure?
No. It's not in 156 2/12/08 - PARKS - BILLS 080078 and 080084 the proposal. It's in their business -- how they structure their businesses at the other cities.
Almost every single course does that, because certain times have greater value than other times. I know -- and there are a number of people who are dedicated to golf. I, unlike the Councilman, am not a golfer, but I've studied the structure. There is no 15 structure that I've ever looked at that has a single fee.
And we have never had a single fee either. I don't want to confuse issues here. We've always had structured fees for different times of play, different times of play, different types of play. So I don't want Mr. Haver to confuse the issues here. We have always had a structured fee system. It just has not had a -- historically it's 157 2/12/08 - PARKS - BILLS 080078 and 080084 not had a discount for City residents, which was your first point.
No. I guess if we're understanding -- because we're going to have to pass this, so I just want to be clear on the passing. At a two-year point, we will revisit the Philadelphia residency discount, and that's satisfactory to you, Mr. Haver?
Yes, Councilwoman. That would be a great step forward, in my opinion, in bringing this company --
Right. But bringing in this company -- and I feel awkward saying it, but bringing in this company is a big step forward.
And the friendly amendment I would make to your comment, Councilwoman, is that we first get a chance to look-see on June 1 when we see how they accommodate the families of the young people attending the area high schools.
Any other questions of these witnesses? (No response.) COUNCILMAN DiCICCO: No 17 discounts for elected officials? (Laughter.)
Soon, Councilman, seniors, retirees. COUNCILMAN DiCICCO: You know about pay-to-play, so we don't want to go down that road.
Councilman, 159 2/12/08 - PARKS - BILLS 080078 and 080084 retirees. COUNCILWOMAN DiCICCO: For the record.
Anyone else here to testify, please, on Bill No. 13 080078? (Witness approached the witness table.)
Fred Maurer. I didn't know this bill was up at all. I do monitor the golf situation in Fairmount Park, so I have some familiarity with it. I've always been pleased that they were trying to do a good job even though the City takes away their assets. 160 2/12/08 - PARKS - BILLS 080078 and 080084 I think if it comes to fees, you got to be very careful. You should know that the ex-Director, Bill Mifflin, tried to bring Tiger Woods here in order to stimulate golf in Philadelphia. It never happened, but I think that was a good attempt as part of the Commission to do a better job for golf. So it's a difficult problem. If you screw around with your fee system, you're going to mess up the negotiation, what they're doing. I do want to caution you, there is a state law that says you cannot charge non-residents a different fee for any facility in the park. It's a state law, and we have already tiered things, graduated to the needs of the business community, but once you put a fee in and it's a different one for non-residents, then you are violating state law. So be very careful how you discuss this matter. You're running afoul of these things. Philadelphia has been great to 161 2/12/08 - PARKS - BILLS 080078 and 080084 deal with residents, because we are a bigger thing than a city park and we have different rules. So be very careful. Don't mess around with their fee systems and violate the residency rules that Philadelphia committed to by the state.
Thank you very much, sir. Anyone else to testify on this bill? (No response.)
This concludes our public hearing on Bill No. 15 080078. We will now move into a public meeting. I would ask Councilman DiCicco for a motion on the amendment to this bill. COUNCILMAN DiCICCO: Thank you, Madam Chair. I move that the amendment to Bill No. 080078 be approved.
Any seconds? (Duly seconded.) 162 2/12/08 - PARKS - BILLS 080078 and 080084
Very well. Then we state that Bill No. 080078 has been amended. We now ask that Bill No. 080078 be moved as amended. COUNCILMAN DiCICCO: Thank you, Madam Chair. I move that Bill No. 080078 as amended be reported out of this Committee with a favorable recommendation, that the rules of Council be suspended so as to permit first reading at our next session. (Duly seconded.)
Bill No. 22 080078 has been moved and properly seconded. All in favor say aye. (Aye.) 163 2/12/08 - PARKS - BILLS 080078 and 080084
Therefore, Bill No. 080078 will be reported out of this Committee with a favorable recommendation and further moved that the rules of Council be suspended so as to permit first reading at the next scheduled session of Philadelphia City Council. This concludes the meeting of the Committee on Parks, Recreation and Cultural Affairs. Thank you all very, very much. (Committee on Parks, Recreation and Cultural Affairs adjourned at 4:40 p.m.) - - - 164 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on February 12, 2008, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)