Oxnard staff recommend five-year management deal with American Golf for River Ridge Golf Club

Steve Howlett, assistant director of public works for Oxnard City, told the City Council staff recommends the council approve and authorize the mayor to execute a five-year golf management agreement with American Golf Corporation for River Ridge Golf Club that would run through 06/30/2030 with an option for a single five-year extension to 06/30/2035.

The proposed contract would replace the current management terms and change the operator’s compensation and performance measures. Under the new proposal the base management fee for the first fiscal year would be $190,000 with an annual CPI inflator capped at 5 percent. American Golf would also contribute $52,500 annually toward capital improvements for a new event space (reception center) during the term of the agreement.

Howlett said the agreement would replace the existing tiered incentive structure with a variable fee equal to 30 percent of gross profit above an annual threshold. The first-year threshold would be the average of the most recent 24 months of gross profit (including a 2023 City Council–approved rate increase). Thereafter the threshold would be adjusted each year based on the National Golf Foundation’s December report percentage for California year-to-date rounds, the staff report said. Howlett said the change is intended to focus incentives on gross profits rather than shrinking expenditures in ways that could harm course conditions or customer experience.

A separate customer-service incentive would pay up to $50,000 annually and would be tied to a net promoter score gathered by a consultant performing anonymous visits and reporting on customer experience. Howlett described the incentive payouts as: average = $10,000, good = $25,000, and great = $50,000.

The proposal would also change invoicing and bank-account controls. The city would deposit the first two months of operating expenses into a golf operations expense account as working capital. The operator would establish the expense account and invoice monthly for expenses (with supporting documentation) and invoice payroll every two weeks. The city would control the golf operations revenue account; the operator would not be permitted to draw from the revenue account or open other accounts. Any interest earned in either account would be city revenue, Howlett said.

The draft agreement requires quarterly inspections of course conditions, sets parameters for major capital improvements (clubhouse roof, driving range, event space) and assigns responsibilities related to the Santa Clara Landfill Post Closure Maintenance Plan. Howlett said the golf enterprise has generated capital reserves in recent fiscal years that can be used for improvements and that the proposed terms would be implemented within the golf enterprise fund (Fund 651). The staff report says there is no impact to the general fund.

Howlett presented two illustrative comparisons provided in the staff report: for fiscal year 2023–24 American Golf collected $327,402 under the current incentive structure; under the proposed terms, assuming the highest customer-service score and accounting for the $52,500 annual event-space payment, the operator would have earned $343,649. Using a projected 4 percent increase for 2024–25, the report estimates American Golf would have earned $384,187 under the proposed structure versus $439,418 under the current contract. The staff report also cited a three-year average operator compensation of $392,084 and an average net surplus for the golf enterprise of $1,350,883 annually.

The staff report concluded with an explicit recommendation that the council approve and authorize the mayor to execute the golf management agreement; no vote or final council action on that recommendation is recorded in the transcript. Howlett closed by saying staff is available for questions.