Title
MOTION TO APPROVE THE FOLLOWING AGREEMENTS:
A) ASSIGNMENT, ASSUMPTION, AND CONSENT AGREEMENT FOR THE MANAGEMENT AND MAINTENANCE OF THE PEMBROKE LAKES GOLF COURSE FROM PROFESSIONAL COURSE MANAGEMENT, LTD. TO PROFESSIONAL COURSE MANAGEMENT VI, INC.
B) ASSIGNMENT, ASSUMPTION, AND CONSENT AGREEMENT FOR THE MANAGEMENT OF THE PEMBROKE LAKES GOLF COURSE PRO SHOP FROM PROFESSIONAL COURSE MANAGEMENT, LTD. TO PROFESSIONAL COURSE MANAGEMENT VI, INC.
C) FOURTH AMENDMENT TO THE MANAGEMENT AND MAINTENANCE OF THE PEMBROKE LAKES GOLF COURSE AGREEMENT WITH PROFESSIONAL COURSE MANAGEMENT VI, INC. TO INCLUDE INCREASES TO THE MANAGEMENT FEE AND OTHER EXPENSE INCREASES ADJUSTING THE ANNUAL CONTRACT AMOUNT TO $1,431,778.88 EFFECTIVE APRIL 15, 2025 AND TO EXTEND THE AGREEMENT FOR A FIVE YEAR PERIOD BEGINNING NOVEMBER 15, 2026 PURSUANT SECTION 35.18(C)(8) OF THE CITY'S CODE OF ORDINANCES
D) FOURTH AMENDMENT TO THE PEMBROKE LAKES GOLF COURSE PRO SHOP AGREEMENT WITH PROFESSIONAL COURSE MANAGEMENT VI, INC. TO INCLUDE INCREASES TO THE MANAGEMENT FEE AND OTHER EXPENSE INCREASES ADJUSTING THE ANNUAL CONTRACT AMOUNT TO $182,347.84 EFFECTIVE APRIL 15, 2025 AND TO EXTEND THE AGREEMENT FOR A FIVE YEAR PERIOD BEGINNING NOVEMBER 15, 2026 PURSUANT SECTION 35.18(C)(8) OF THE CITY'S CODE OF ORDINANCES
Summary Explanation and Background
PROCUREMENT PROCESS TAKEN:
- Chapter 35 of the City’s Code of Ordinances is titled “PROCUREMENT PROCEDURES, PUBLIC FUNDS.”
- Section 35.18 of the City's Code of Ordinances is regarding "COMPETITIVE BIDDING OR COMPETITIVE PROPOSALS REQUIRED; EXCEPTIONS."
- Section 35.18(C) states that "Only the following situations are exempt from the competitive bid and competitive proposal requirements of this section:"
- Section 35.18(C)(8) states, "Best interest of the city. Purchases of and contracts for commodities or services are exempt from this section when the City Commission declares by a simple majority affirmative vote that the process of competitive bidding and competitive proposals is not in the best interest of the city. The City Commission shall make specific factual findings that support its determination, and such contracts may be placed on the City Commission consent agenda."
- Section 35.21 of the City's Code of Ordinances is titled "AWARD OF CONTRACT."
- Section 35.21(A) of the City's Code of Ordinances is titled "City Commission approval.
- Section 35.21(A)(1) states, "An initial purchase of, or contract for, commodities or services, in excess of $25,000, shall require the approval of the City Commission, regardless of whether the competitive bidding or competitive proposal procedures were followed."
SUMMARY EXPLANATION AND BACKGROUND:
1. The City of Pembroke Pines currently maintains two agreements with Professional Course Management: one for the management, operation, and maintenance of the Pembroke Lakes Golf Course, and another for the management and operation of the Pembroke Lakes Golf Pro Shop.
2. Since 1996, Professional Course Management, Ltd. (PCM) has managed and operated the Pembroke Lakes Golf Course. Under this agreement, PCM is responsible for maintaining the course, overseeing its overall operations, marketing and promoting the facility, and recruiting, training, and educating the necessary staff. The current annual value of this agreement is $1,325,778.87.
3. PCM has managed and staffed the Golf Course Pro Shop since 2009, taking over staffing responsibilities from the City. This change resulted in annual savings of $50,000 for the City in fiscal year 2009. The current value of this agreement is $177,347.84 per year. It is important to note that this agreement covers staffing and operations of the pro shop but does not include the retail aspects. The retail portion is governed by a separate agreement with TA Golf Sales, under which the City receives 5% of gross sales revenues.
4. Mr. Johnny Laponzina, President and owner of Professional Course Management, Ltd., has requested that both the Golf Course Management Agreement and the Golf Course Pro Shop Agreement be assigned to Professional Course Management VI, Inc., a newly formed company of which he is also the owner.
5. Both the Golf Course Management Agreement and the Golf Pro Shop Staffing Agreement are set to expire on November 15, 2026, and neither includes any renewal options.
6. On December 11, 2024, the City received a letter from Mr. Laponzina outlining PCM’s request to renew both existing agreements for an additional five years, extending the term through November 15, 2031. The letter also proposed the following amendments:
A. Increase the management fee for the Golf Course Management and Maintenance Agreement from $100,000 to $200,000 per year.
B. Increase the management fee for the Golf Course Pro Shop Management Agreement from $15,000 to $20,000 per year.
C. Revise the fee escalation clause: rather than limiting a 3% annual increase to only the third, fourth, and fifth years for staffing and maintenance fees, PCM proposes applying an annual 3% increase to all five years and have the annual 3% increase apply to the management fee for both agreements.
D. Raise the reimbursement cap for healthcare insurance to accommodate additional costs incurred under the Affordable Healthcare Act from $30,000 to $35,000.
E. Raise the reimbursement cap for the city-required Environmental/Pollution Liability insurance from $1,500 to $2,500.
PCM asserts that these modifications are essential to sustain the management of the golf course given the current economic conditions, including record inflation, significant increases in minimum wages, and rising operational costs, which have made it increasingly challenging to maintain the same level of service without adjusting the financial terms.
7. The Fourth Amendment to both agreements presented in this agenda item incorporates all of the requested changes, effective April 15, 2025, and extends the agreements for an additional five years through November 15, 2031.
8. If approved effective April 15, 2025, the proposed adjustments will result in a $54,124.83 increase in the 2025 budget to cover the remaining months of the current fiscal year. Moving forward, these adjustments will be integrated into the proposed golf course budget-a self-supported division-ensuring that the additional expenses are fully accounted for in future budget balancing.
9. Since the current agreements do not provide for additional renewal periods, the Recreation and Cultural Arts Director is requesting approval of these amendments under Section 35.18(C)(8) of the Procurement Code. This section exempts purchases and contracts for commodities or services from competitive bidding when the City Commission, by a simple majority vote, determines that such a process is not in the best interest of the City. In such cases, the Commission must document specific factual findings, and these contracts may be placed on the consent agenda.
The factual findings supporting the approval of the two fourth amendments are as follows:
- PCM has provided golf course management services to the Pembroke Lakes Golf Course for the past 30 years.
- PCM has consistently maintained, managed, and operated the golf course effectively, even increasing rounds played and corresponding revenues despite significant market competition.
- The high maintenance demands of the golf course turf mean that transitioning between vendors or shifting to in-house staff could result in service interruptions.
- An in-house analysis confirms that the PCM contract delivers substantial value to the City.
10. Section 5.0(A) of the City’s Management Policy on Concessions, Leases, and Interlocal Agreements mandates a feasibility review of all function sourcing contracts upon expiration or renewal. The purpose of the analysis is to evaluate the financial effectiveness of continuing to outsource the golf course management service. The full report, titled "Golf Course Maintenance and Management Function Sourcing Analysis," is attached to this agenda item as Exhibit #5.
11. The Administration conducted the function sourcing analysis using data from the budget module, information provided by the contractor, and comparable data from surrounding municipalities. The review of personnel and operating costs indicated that transitioning to an in-house management model would significantly increase expenses. Year one in-house management costs are projected at approximately $3.66 million, which exceeds PCM's current costs by nearly $2 million annually. In addition, transitioning operations in-house would result in the loss of approximately $500,000 in annual revenue currently generated by PCM’s Premier Card Program
12. Administration requests that the Commission approve the Assignment, Assumption, and Consent Agreements transferring both the Pembroke Lakes Golf Course Management Agreement and the Pembroke Lakes Golf Pro Shop Agreement from Professional Course Management, Ltd. to Professional Course Management VI, Inc.
13. In addition, Administration has been satisfied with the performance of the Contractor to date and further requests that the City Commission approve the following Fourth Amendments:
For the Pembroke Lakes Golf Course Management and Maintenance Agreement: an increase in the management fee and adjustments for additional expenses, setting the annual contract amount at $1,431,778.88 effective April 15, 2025, and extending the agreement for a five-year period beginning November 15, 2026, pursuant to Section 35.18(C) of the City's Code of Ordinances.
For the Pembroke Lakes Golf Pro Shop Management Agreement: an increase in the management fee and adjustments for additional expenses, setting the annual contract amount at $182,347.84 effective April 15, 2025, and extending the agreement for a five-year period beginning November 15, 2026, pursuant to Section 35.18(C) of the City's Code of Ordinances.
Financial Impact
FINANCIAL IMPACT DETAIL:
a) Initial Cost: Effective April 15, 2025, the annual amount will be $1,431,778.88 for the Golf Course Management and Maintenance Contract and $182,347.84 for the Golf Pro Shop Management Contract. Effective November 16, 2025, and annually thereafter, the fees will be increased by 3%, except for the reimbursement for costs related to the affordable care act, environmental/pollution liability insurance, and theft insurance coverage, which will remain the same throughout the remainder of the contract.
b) Amount budgeted for this item in Account No: The current agreements are funded in the following accounts for this fiscal year: 001-575-7006-531500-0000-000-0000- - Professional Svcs - other and 001-575-7006-534950-0000-000-0000- - Contract Maintenance The revised contract amount has been prorated for the remainder of the fiscal year. The adjustments include only the pro rata share of the management fee increase and the updated reimbursement caps for healthcare costs and liability insurance. The existing 3% increase is already incorporated into the current contract amount, resulting in a shortfall of $54,125 for the rest of the fiscal year.
|
Account |
Amended Budget |
Current Budget |
Budget Adjustment |
|
531500 |
$ 762,841.83 |
$ 708,717.00 |
$ 54,125 |
|
534950 |
$ 789,474.86 |
$ 789,475.00 |
$ - |
c) Source of funding for difference, if not fully budgeted: If both amendments are approved, the following budget adjustment will be processed.
From:
001-575-7006-546150-0000-000-0000 - R&M Land Bldg & Improvement $54,125
To:
001-575-7006-531500-0000-000-0000 - Professional Svc - Other $54,125
d) 5 year projection of the operational cost of the project:
The operational information below covers the 2025 fiscal year which is year 4 of the current agreement and the proposed 2026 budget which will be the final year of the current agreement.
|
|
Current |
Year 5 |
|
Revenues |
$3,247,631 |
$3,706,080 |
|
City Exp |
$1,675,171 |
$2,044,689 |
|
PCM Contract |
$1,572,460 |
$1,661,391 |
|
Net Cost |
$0 |
$0 |
The operational information below is for the five year extension.
Golf Course Revenues and Expenditures. A 2% increase is included in Revenues
Year One begins 11/15/2026
|
|
Year One |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
Revenues |
$3,780,202 |
$3,855,806 |
$3,932,922 |
$4,011,580 |
$4,091,812 |
|
City Exp |
$2,070,128 |
$2,095,589 |
$2,121,058 |
$2,146,519 |
$2,171,958 |
|
PCM Contract |
$ 1,710,074 |
$ 1,760,217 |
$ 1,811,864 |
$ 1,865,061 |
$ 1,919,854 |
|
Net Cost |
$0 |
$0 |
$0 |
$0 |
$0 |
The above Expenditures include the cost of both agreements.
e) Detail of additional staff requirements: Not Applicable
FEASIBILITY REVIEW:
A feasibility review is required for the award, renewal and/or expiration of all function sourcing contracts. This analysis is to determine the financial effectiveness of function sourcing services.
a) Was a Feasibility Review/Cost Analysis of Out-Sourcing vs. In-House Labor Conducted for this service? Yes. See Exhibit #5
b) If Yes, what is the total cost or total savings of utilizing Out-Sourcing vs. In-House Labor for this service? See Exhibit #5