Golf Course Enterprise Fund Performance Audit

Transcription

1 Golf Course Enterprise Fund Performance Audit September 2010 Office of the Auditor Audit Services Division City and County of Denver Dennis J. Gallagher Auditor

2 The Auditor of the City and County of Denver is independently elected by the citizens of Denver. He is responsible for examining and evaluating the operations of City agencies for the purpose of ensuring the proper and efficient use of City resources and providing other audit services and information to City Council, the Mayor and the public to improve all aspects of Denver s government. He also chairs the City s Audit Committee and oversees the City s Comprehensive Annual Financial Report (CAFR). The Audit Committee is chaired by the Auditor and consists of seven members. The Audit Committee assists the Auditor in his oversight responsibilities of the integrity of the City s finances and operations, including the integrity of the City s financial statements. The Audit Committee is structured in a manner that ensures the independent oversight of City operations, thereby enhancing citizen confidence and avoiding any appearance of a conflict of interest. Audit Committee Dennis Gallagher, Chair Maurice Goodgaine Jeffrey Hart Timothy O Brien Robert Bishop Robert Haddock Bonney Lopez Audit Staff Audrey Donovan, Deputy Director, CIA Dawn Hume, Internal Audit Supervisor Kristin Donald, Lead Internal Auditor Travis Henline, Senior Internal Auditor You can obtain free copies of this report by contacting us at: Office of the Auditor 201 W. Colfax Avenue, Dept. 705 Denver CO, (720) Fax (720) Or view an electronic copy by visiting our website at:

3 City and County of Denver Dennis J. Gallagher Auditor 201 West Colfax Ave., Dept. 705 Denver, Colorado FAX September 16, 2010 Mr. Kevin Patterson, Manager Department of Parks and Recreation City and County of Denver Dear Mr. Patterson: Attached is the Auditor s Office Audit Services Division s internal controls report on the Department of Parks and Recreation Golf Course Enterprise Fund. The purpose of the audit was to assess the internal controls related to the management of the fund, to evaluate contract compliance with applicable rules and regulations, and to identify possible inefficiencies and opportunities for improvement. The audit identified reportable conditions which are fully described in the accompanying report. If you have any questions, please call Kip Memmott, Director of Audit Services, at Sincerely, Dennis J. Gallagher Auditor DJG/ect cc: Honorable John Hickenlooper, Mayor Honorable Members of City Council Members of Audit Committee Ms. Roxane White, Chief of Staff Mr. Claude Pumilia, Chief Financial Officer Mr. David Fine, City Attorney Mr. L. Michael Henry, Staff Director, Board of Ethics Ms. Lauri Dannemiller, City Council Executive Staff Director Ms. Beth Machann, Controller To promote open, accountable, efficient and effective government by performing impartial reviews and other audit services that provide objective and useful information to improve decision making by management and the people. We will monitor and report on recommendations and progress towards their implementation.

4 City and County of Denver Dennis J. Gallagher Auditor 201 West Colfax Ave., Dept. 705 Denver, Colorado FAX AUDITOR S REPORT We have completed an audit of the Department of Parks and Recreation (DPR) Golf Course Enterprise Fund for the period January 1, 2009 through December 31, The purpose of the audit was to assess the internal controls related to the management of the fund, to evaluate contract compliance with applicable rules and regulations, and to identify possible inefficiencies and opportunities for improvement. This performance audit is authorized pursuant to the City and County of Denver Charter, Article V, Part 2, Section 1, General Powers and Duties of Auditor, and was conducted in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives. The audit revealed that the Department has taken steps to mitigate control deficiencies identified by previous audits. However, long term issues with the Wellshire golf course restaurant contract have not been addressed and the audit also identified potential revenue maximization opportunities for DPR s consideration. We extend our appreciation to the Parks and Recreation personnel who assisted and cooperated with us during the audit. Audit Services Division Kip Memmott, MA, CGAP, CICA Director of Audit Services To promote open, accountable, efficient and effective government by performing impartial reviews and other audit services that provide objective and useful information to improve decision making by management and the people. We will monitor and report on recommendations and progress towards their implementation.

5 TABLE OF CONTENTS EXECUTIVE SUMMARY 1 INTRODUCTION & BACKGROUND 3 SCOPE 5 OBJECTIVES 5 METHODOLOGY 5 FINDING 6 Wellshire LLC Contract Terms & Conditions Still Not Being Enforced 6 Other Pertinent Information 10 RECOMMENDATIONS 12 APPENDICES 13 Appendix A Golf Course Descriptions 13 Appendix B Wellshire Annual Compensation Payment Comparison 14 AGENCY RESPONSE 15

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7 EXECUTIVE SUMMARY The audit included a review of findings from previous audits performed examining the Golf Enterprise Fund and determined that the Department of Parks and Recreation maintains proper internal controls related to the management of the City's Golf Course Enterprise Fund. 1 DPR has improved controls over contract compliance compared to the 2007 audit findings with the exception of the Wellshire LLC contract, discussed below. 2 Follow-Up Work Revealed Improved Controls Audit work revealed that since the audit finding of 2007 controls have been implemented over cash Improved controls over handling, the reconciliation process, and inventory cash handling, control. Additionally, as suggested in the 2007 audit, reconciliations, and the Department of Parks and Recreation (DPR) inventory created policies and procedures governing contract administration and implemented a new Point of Sale (POS) system to strengthen inventory and revenue recognition controls. Wellshire LLC Contract Terms & Conditions Still Not Being Enforced Issues with the administration of the Wellshire contract identified by the 2007 audit have not been corrected. Additionally, DPR efforts to resolve this matter have created additional issues, fostered a perception of unfairness, and raised questions of transparency around this contract. The audit of Wellshire LLC contract released in September 2007 noted the contractor did not initiate $1,250,000 in capital improvements required per the contract. As a result, the previous audit recommended termination of the contract for default. DPR s response to the audit recommendation stated: Parks and Recreation has been aware of the upcoming Capital Improvement deadline and have been in negotiations with Wellshire LLC to amend the Concession License in a number of aspects including capital improvements. In all likelihood, that dollar amount of capital improvements will increase significantly and an extension of time will be granted for the Concessionaire to perform these improvements. We expect to have negotiations complete within the next few weeks and the amendment processed close to the current deadline for capital improvement completion. 1 September 2007 Parks and Recreation revenue and contract compliance audits - City Park & Willis Case Golf Courses, Unzip It Productions, LLC; City Park Golf Course Worldwide Concessions, LLC and S&H Concessions, LLC; Overland and Kennedy Golf Courses, KLAK Golf Prime II, LLC; Evergreen Golf Course; RLR Inc. Parks and Recreation Wellshire LLC, Wellshire Golf Course 2 Parks and Recreation Wellshire LLC, Wellshire Golf Course Revenue & Contract Compliance Audit, September _Audit Parks & Recreation, Wellshire LLC - Wellshire Golf Course Report P a g e 1 Office of the Auditor

8 However, DPR did not execute this remedy and, instead of executing a new contract, DPR simply amended the existing contract to provide the contractor with more favorable terms including a decrease in rent. The contractor s capital improvement requirement amount was not increased, contradicting DPR s response to the 2007 audit. DPR issued a request for proposal (RFP) for concession rights to the Wellshire restaurant in December of 2008, over a year after the 2007 audit. Two bids were submitted; one from the current contractor and one from a group that includes a contractor that has been awarded catering contracts at other DPR golf courses. Despite entering an RFP process and receiving legitimate competing bids, DPR decided to simply amend the current agreement with Wellshire LLC instead of awarding a new contract. This process has raised questions about the fairness and the integrity of DPR s contracting process. Issues related to this contract are as follows: Simultaneous to the RFP process for these concession rights, the City was in active negotiations with the current contractor to amend the existing agreement, raising significant questions about the integrity of the RFP process. Additionally the timeframe for the RFP was very short and initiated during the December holiday season (the proposal submittal deadline was on Christmas Eve); Though the City s source selection committee for this RFP scored the new bidder s proposal significantly higher than the current contractor s proposal, DPR opted to remain with the current contractor; and More than two years after the capital improvements were required to have been completed, DPR has still not held the contractor responsible for these improvements and has been unable to reach a new agreement with the contractor to address this issue and make the City whole. In addition to questions of fairness and transparency with this contract, the term and compensation requirements of the current amendment do not allow DPR to maximize revenue. Specifically, Wellshire LLC only pays a set rent amount while other golf course concessionaires pay a percentage of their revenue when greater than the rent amount. In 2009, the City received zero dollars in compensation payments from Wellshire LLC and spent over $43,000 on utilities for the restaurant. DPR s lack of contract enforcement, questionable RFP process, varying contract terms with similar vendors, and an unreasonably protracted contract negotiation history creates a potential perception that DPR s contract process for golf course concessionaires is inconsistent and unfair. Furthermore, since the capital improvements of $1,250,000 have not been made to the Wellshire restaurant facility, the citizens of the City and County of Denver have not received the increased benefits that were legally required and agreed upon in the contract since Capital improvements of $1,250,000 not made to Wellshire restaurant City and County of Denver P a g e 2

9 INTRODUCTION & BACKGROUND Golf Course Enterprise Fund The Department of Parks and Recreation (DPR) operates the Golf Course Enterprise Fund. The fund accounts for all city-owned golf courses. Governmental accounting is comprised of three types of funds. Governmental funds are primarily funded by general sales and property taxes and expenditures are for basic government function. An example of this type of fund is the City s General Fund. Proprietary funds are the closest fund types to private sector accounting. There are two types of funds, enterprise and internal service. According to Generally Accepted Accounting Principles, governments are to account for their business type activities using enterprise funds. For these types of funds, a fee is charged for the goods and services provided. The Golf Course Enterprise Fund is an example of a proprietary fund. Fiduciary funds are trust funds that account for assets held by the government as a trustee or as an agent for other governmental units or funds. These include expendable and nonexpendable trust funds, pension trust funds and agency funds. The Golf Course Enterprise Fund revenue is derived from the operation of city-owned golf facilities, including golf fees, equipment rentals, income from concession contracts, charges for facility usage, and proceeds from golf revenue bonds. See Table 1 below for revenue and expenditures for the past four years. Table 1: Overall Financial Information Golf Course Enterprise Fund - Financial Information (Amounts in Millions) * Revenues Expenditures * un-audited information P a g e 3 Office of the Auditor

10 City Golf Courses The Golf Course Enterprise Fund operates and maintains the City's five 18-hole golf courses, one 27-hole golf complex, two 9-hole par-3 courses, 54-holes of miniature golf, a driving range and three pro shops at seven golf course locations. 3 Each course offers a unique experience from Aqua Golf, an aqua driving range, to Wellshire and its Tudorstyle clubhouse, that originally opened in 1926 as a private country club. All but one location, Evergreen which is operated by a concessionaire, are managed by the Department. DPR also negotiates and manages the associated concession contracts. Table 2 is the unaudited revenue and expenditures for each course for Table 2: Financials by Course Golf Course Financial Information* Course Revenue Expenditures Income/ (loss) City Park $1,580,995 $1,131,331 $449,664 Harvard Gulch $250,843 $283,696 $(32,853) Kennedy $1,714,676 $1,033,734 $680,942 Overland $1,078,435 $681,544 $396,891 Wellshire $1,715,606 $1,286,955 $428,651 Willis Case $2,032,565 $1,141,401 $891,164 Evergreen $277,004 $0 4 $277,004 Aqua Golf $310,477 $217,557 $92,920 *Other adjustments made for financials and administrative costs were not included. Implementation of a New Point of Sales System DPR purchased and implemented a new software system through US edirect. The system went live in April The new point of sales system is expected to reduce operator error and improve profitability with real time golf reservations by eliminating non-essential paperwork. The system includes a perpetual inventory system and will provide golf course management with an enhanced process to receive, track, and adjust Pro Shop inventory. In addition, the software provides an audit trail for all financial transactions performed by Pro Shop staff. 3 See APPENDIX A for description of golf courses. 4 Concessionaire operates the golf course and a percentage of gross revenue is paid to the City. The concessionaire incurs all expenses. City and County of Denver P a g e 4

11 SCOPE The audit assessed the internal controls related to the management of the City's Golf Course Enterprise Fund for the period January 1, 2009 through December 31, OBJECTIVES The objective of this audit was to determine whether the Department of Parks and Recreation; maintains proper internal controls related to the management of the City's Golf Course Enterprise Fund, adheres to sound contract procurement and administration practices, and to assess the Department s efforts to maximize fund revenues. METHODOLOGY We utilized several methodologies to achieve the audit objective. These evidence gathering techniques included, but were not limited to: Interviewing Parks and Recreation management and staff; Reviewing prior audit findings; Reviewing internal controls and accounting processes related to the management of the Golf Course Enterprise fund; Reviewing City rules and regulations; Reviewing price structures of other golf courses; Reviewing contract requirements and amendments; Evaluating for evidence of contract compliance with applicable rules and regulations; Performing on-site physical observations; Evaluating revenue contracts from a compliance and revenue maximization perspective; and Verifying capital improvements were made in accordance with contract terms. P a g e 5 Office of the Auditor

12 FINDING The audit included follow up work on findings from previous audits performed examining the Golf Enterprise Fund by the Auditor s Office in Follow-Up Work Revealed Improved Controls Audit work revealed that controls are in place over cash handling, the reconciliation process, and inventory control. Additionally, the Department of Parks and Recreation (DPR) created policies and procedures governing contract administration and implemented a new Point of Sale (POS) system to strengthen inventory and revenue recognition controls. The POS system includes enhanced inventory reporting and management capabilities such as variance reports, cost of goods sold, and profit margin. The new system will also allow the golf courses to begin tracking shrinkage for the first time and allow revenue to be recorded immediately. The system will also improve day-to-day operations to include making tee times, preventing individuals from playing on the course without paying, and managing general golf functions. DPR has improved controls over contract compliance compared to the 2007 audit findings with the exception of the Wellshire LLC contract, discussed below. 6 In addition to the finding related to the Wellshire LLC contract, audit work identified possible revenue maximization opportunities. Specifically, audit work revealed that a tiered pricing structure for green fees and a strategic marketing plan for Denver golf courses could benefit revenue generation efforts. Wellshire LLC Contract Terms & Conditions Still Not Being Enforced Wellshire LLC has operated the Wellshire golf course restaurant since An audit released September 2007 by the Auditor s Office noted Wellshire LLC did not initiate $1,250,000 in capital improvements required per the contract. The previous audit recommended termination of the contract for default but DPR disagreed and responded with a plan to increase the capital improvement amount and allow five additional years for the contractor to complete improvements. However, a review of the current contract amendment indicated: Capital improvement amounts remained the same; Annual compensation payments were reduced; and DPR overrode the Source Selection Committee Recommendation 5 September 2007 Parks and Recreation revenue and contract compliance audits - City Park & Willis Case Golf Courses, Unzip It Productions, LLC; City Park Golf Course Worldwide Concessions, LLC and S&H Concessions, LLC; Overland and Kennedy Golf Courses, KLAK Golf Prime II, LLC; Evergreen Golf Course; RLR Inc.Parks and Recreation Wellshire LLC, Wellshire Golf Course 6 Revenue & Contract Compliance Audit, September 2007 & 2007 Audit Parks & Recreation Wellshire LLC Wellshire Golf Course Report City and County of Denver P a g e 6

13 As of June 2010, three years past the original contract due date, improvements had not been started. Over one year after the release of the 2007 audit report, DPR issued a request for proposal (RFP) for concession rights to the Wellshire restaurant. Two bids were submitted, one from Wellshire LLC, and another from Wellshire 3333, a group that includes a contractor already providing catering services at other City golf courses. However, instead of executing a new contract, DPR simply amended the existing contract with Wellshire LLC. The decision not to enter a new contract for this concession is concerning for several reasons. First, the amendment did not address the contractor s failure to make capital improvements and did not increase the amount of such improvements despite DPR s prior claim that this would likely occur. Additionally, the timeframe of the RFP process and the subsequent execution of the amendment to the existing contract raises questions about the integrity of the RFP process for this concession. Specifically, audit work revealed DPR initiated the amendment process four business days prior to the RFP being issued and the amendment was executed 12 business days after the bids were closed as the timeline below illustrates. Furthermore, a review of the RFP selection score sheet indicated the other bidder s proposal scored significantly higher than the Wellshire LLC proposal. The Department s Manager rejected the other bidder and chose Wellshire based on financial considerations. P a g e 7 Office of the Auditor

14 Audit work determined that a primary cause for the extraordinary amount of time and resources spent on this issue without resolution is a result of differing interpretations of contract provisions related to building maintenance responsibilities. DPR management indicated they could not enforce the termination of the contract for the contractor s failure to make capital improvements because the City has not fully complied with contract requirements for building maintenance. 7 Section V of the contract titled Responsibilities of the City sub section D states: Clubhouse Structural Maintenance Maintain, repair and replace as required all structural elements of the buildings in which the Premises are located and all mechanical systems, including, but not limited to, plumbing, electrical, heating and air conditioning, except as otherwise provided in section IX. Per DPR management, the contractor has provided receipts for building repairs they have paid for even though they contend such repairs are the City s responsibilities per the contract term cited above. Related to this point, in early 2010, DPR sought and received City Council approval for a budget adjusting ordinance amounting to $300,000 for Wellshire clubhouse repairs. However, the Department has yet to allocate this appropriation for repairs and the citizens who patronize Wellshire Inn are negatively impacted. Specifically, a poorly operating air conditioning system during summer months. Disagreements between the two parties continue regarding who should pay for repairs even though the contract appears to indicate that HVAC maintenance is a City responsibility. Department management believes the contract language regarding building maintenance requirements is vague yet no changes to the maintenance section language have been made within the previous two contract amendments. The contractor has been operating a business on the premises for over 30 years and is complying with other areas of the contract (e.g. rent terms) so it is unclear as to why DPR cannot enforce the capital improvement requirement even though disagreements exist regarding other contract terms. Further, audit work concluded that the terms and compensation requirements of the current contract do not allow DPR to maximize revenue. The Wellshire LLC contract is in excess of 50 years, which is over 25 years greater than other DPR concessionaire contracts. Compensation requirements also differ considerably than other concessionaires. Specifically, Wellshire LLC only pays a set rent amount while other concessionaires pay a percentage of their revenue when greater than the rent amount. Table 3 demonstrates the differences between other DPR concessionaire compensation requirements and length of contract terms. 7 The Wellshire Inn began operations in 1926 making the building over 80 years old and is a historical landmark within the Wellshire community. General maintenance could result in higher than normal costs due to the age of the structure. City and County of Denver P a g e 8

15 Table 3: Department Term Comparison Contract Term Comparison* Department Contractor Minimum rent payment % of Gross Revenue Term (in years) Golf Wellshire LLC Y N 51.4 Golf Flog LLC Y Y 7.2 Golf Flog LLC Y Y 7.2 Golf RLR Y Y 15.0 Golf KLAK Y Y 16.0 Golf KLAK Y Y 11.4 Parks and Recreation Parks and Recreation Parks and Recreation Pahaska Tepee Concessions, Inc Biker Jim's Concessions LLC Echo Lake Lodge Concessions, LLC Y Y 6.2 Y Y 3.0 Y Y 6.2 *Harvard Gulch Golf Course and Aqua Golf are not included as they are operated exclusively by the City. In 2009, the Department spent $43,923 on utilities to operate the Wellshire Restaurant and received $0 in compensation payments from Wellshire LLC due to off setting credits for utility payments required in the contract. Table 4 illustrates the 2009 compensation payments the Department received from contractors at each course. 8 Table 4: 2009 Compensation Payments Department Contractor City Golf Course 2009 compensation payments Percent of total Golf Wellshire LLC Wellshire $0 0.0% Golf Flog LLC Willis Case $20, % Golf Flog LLC City Park $20, % Golf RLR Evergreen* $277, % Golf KLAK Overland $80, % Golf KLAK Kennedy $132, % $530,847 *Evergreen includes concession as well as green fees Furthermore, the second amendment to the contract not only reduced current compensation payments but also future compensation payments to the City as well. 9 However, DPR s concessions in this area have not induced Wellshire LLC to begin making the capital improvements they have agreed to in the amended contract. 8 These payments are for concession revenue with the exception of Evergreen which includes green fees due to the entire course being operated by the contractor. 9 See APPENDIX B - Compensation Payment Comparison for the last two amendments. P a g e 9 Office of the Auditor

16 Unfavorable Contract Terms Impact Enterprise Fund Revenue and Capital Improvement Benefits DPR s lack of contract enforcement, questionable RFP timeline, varying contract terms with similar vendors, and poor contract negotiation history appears to have resulted in inequitable agreements, creating a potential perception that DPR s contract process for golf course concessionaires is inconsistent and unfair. Furthermore, since the capital improvements of $1,250,000 have not been made to the Wellshire restaurant facility, the citizens of the City and County of Denver have not received the increased benefits that were legally required and agreed upon in the contract since Other Pertinent Information Audit work identified areas that could potentially lead to increased revenue for the Golf Course Enterprise Fund. Opportunities Exist to Increase Golf Course Enterprise Fund Revenue Auditors reviewed the pricing structure for all golf courses owned and operated by the City and County of Denver. The analysis revealed all City and County golf courses charge the same amount for green fees when playing 9-holes or 18-holes of golf except for Evergreen, which is managed by a concessionaire. Enterprise funds must generate revenues to support the business, much like the private sector. Enterprise funds generally do not receive governmental type revenue such as sales and property tax. The Golf Course Enterprise Fund must generate appropriate revenue levels to cover operating costs and increase net assets. A tiered pricing system means the cost of green fees for the same day and same time may be different depending on the course. Green fee prices are determined by a number of factors including the cost to maintain the course and clubhouse, the services and amenities provided at the golf course, the perceived value received by the customer, and the location and demographics of the area. The City of Aurora uses a tiered pricing for green fees. In 2009, Aurora had over $9 million in revenue from seven courses compared to the City s $8.3 million from eight courses. Additionally, Brighton public golf courses also have a tiered pricing structure. Tiered pricing may allow DPR to increase golf revenue to supplement the enterprise fund and allow for enhanced maintenance and improvements to City golf courses. Table 5 illustrates the green fee structure of the golf courses reviewed. City and County of Denver P a g e 10

17 Golf Course Type / Location Table 5: Green Fee Comparison Golf Course Fee Comparison 18 Holes 9 Holes Weekday Weekend Weekday Weekend City Park A $26.00 $35.00 $16.00 $18.00 Evergreen A $22.00 $32.00 $14.00 $16.00 Kennedy A $26.00 $35.00 $16.00 $18.00 Overland A $26.00 $35.00 $16.00 $18.00 Wellshire A $26.00 $35.00 $16.00 $18.00 Willis Case A $26.00 $35.00 $16.00 $18.00 Saddle Rock B $36.00 $46.00 $18.00 $23.00 Murphy Creek B $34.00 $44.00 $17.00 $22.00 Meadow Hills B $29.00 $35.00 $14.50 $17.50 Aurora Hills B $25.00 $29.00 $12.50 $14.50 Fitzsimons B $23.00 $27.00 $11.50 $13.50 Springhill B $22.00 $26.00 $11.00 $13.00 The Dunes C $33.00 $42.00 $23.00 $23.00 The Knolls C $24.00 $27.00 $15.00 $15.00 A = City and County of Denver, B = City of Aurora, C = Brighton Public Courses Additional audit work determined that DPR currently does not have a specific marketing plan in place to increase revenue at Denver golf courses. However, during the course of the audit, DPR issued a request for proposal to address issues related to strategic planning, marketing, and an analysis of green fee structure. The scope of work does not include a citizen survey addressing the effect of tier pricing on the community. At the conclusion of fieldwork, a bidder had not been chosen. P a g e 11 Office of the Auditor

18 RECOMMENDATIONS According to the City Attorney s Office and DPR management, a new agreement with the contractor is imminent and that the agreement will address the capital improvement issue. However, this same position was proffered in 2007 and did not come to fruition. As such, the Auditor s Office will continue to monitor and report on this issue until the matter has been resolved and the City made whole. We offer the following recommendations to assist the Department of Parks and Recreation to maximize revenue of the Golf Course Enterprise Fund. 1.1 The Department of Parks and Recreation should either rebid or renegotiate and legally execute the Wellshire Restaurant concessionaire contract by October 31, The new contract should be consistent with other concessionaire contracts within the Golf Enterprise Fund. The new agreement should address the following: Specific maintenance requirements of the historic building that is equitable for the Department and the concessionaire; and Monitoring requirements and a deadline for the completion of $1,250,000 capital improvements. 1.2 The Department of Parks and Recreation should continue their efforts to create a strategic plan, marketing efforts, and an analysis of greens fees. Additionally, the scope of work in DPRs proposal should include a citizen survey to address the impacts of a tiered pricing approach on the community. City and County of Denver P a g e 12

19 APPENDICES Appendix A Golf Course Descriptions 10 Aqua Golf - Aqua golf features an aqua driving range with two 18- hole miniature golf courses. The brand new clubhouse has a meeting room available for birthday parties and corporate outings. City Park - This 18-hole regulation Denver golf course is located by the Denver Zoo and Denver Museum of Natural History. Evergreen - Evergreen Golf Course is 30 minutes away from Denver, located west of Evergreen's Mountain Village. It features an 18-hole executive course, pro shop, and restaurant. Kennedy - This 27-hole regulation course includes a 9-hole par three, lighted driving range features miniature golf, a pro shop and restaurant. Harvard Gulch - This nine-hole par three course is located in south Denver. Overland - Overland Golf Course is the original Denver Country Club, opening in This 18-hole regulation course includes a pro shop, driving range, and restaurant. Wellshire - This 18-hole course features 6,542 yards of golf from the longest tees for a par of 71. Designed by Donald Ross in 1926, and voted one of the best public facilities in the nation. Willis Case - The course is just seven minutes northwest of downtown Denver. This 18-hole regulation golf course includes a pro shop and restaurant. 10 Information obtained from Parks and Recreation s website P a g e 13 Office of the Auditor

20 Appendix B Wellshire Annual Compensation Payment Comparison RC3A004(1) * RC3A004(2) * Difference Term Amount Years Term Amount Years 6/1/03-5/31/04 25, /1/03-5/31/04 25,000 1 $0 6/1/04-5/31/05 25, /1/04-5/31/05 25,000 1 $0 6/1/05-5/31/06 50, /1/05-5/31/06 50,000 1 $0 6/1/06-5/31/07 50, /1/06-5/31/07 50,000 1 $0 6/1/07-5/31/08 75, /1/07-5/31/08 50,000 1 ($ 25,000) 6/1/08-5/31/17 100, /1/17-5/31/22 6/1/22-5/31/27 100,000 + CPI (A) 100,000 + CPI (C) * Date Amendment signed by the Mayor 6/1/08-5/31/12 50,000 4 ($200,000) 6/1/12-5/31/17 75,000 5 ($125,000) 5 6/1/17-5/31/22 5 6/1/22-5/31/32 100,000 + CPI (A) 100,000 + CPI (C) 5 (B) 10 (B) TOTAL ($350,000) + (B) (A) Cumulative Consumer Price Index (CPI) from ; maximum not to exceed 60%. Consumer Price Index (CPI) is measured monthly by the Bureau of Labor Statistics (BLS) on goods and services in terms of the prices during the same period in a previous year, to show effect of inflation on purchasing power. 11 (B) Does not include CPI calculation; CPI benefit unknown (based on future performance that has not occurred) (C) Annual rate of cumulative CPI from ; maximum not to exceed 30% 11 United States Department of Labor, Bureau of Labor Statistics definition of the Consumer Price Index. City and County of Denver P a g e 14

21 AGENCY RESPONSE P a g e 15 Office of the Auditor

22 City and County of Denver P a g e 16