Decision details

To consider:

·    Entering into a one year extension to the current contract between the Council acting as Corporate Trustee of the Charity known as the Cobtree Manor Estate and the operator of Cobtree Manor Park Golf Course;  and

·    Giving the Officers authority to investigate the options around entering into considerably longer term future arrangements in respect of the operation of the Golf Course and to report back to the Committee with recommendations.

1.  That agreement be given to a one year extension to the current contract relating to the operation of Cobtree Manor Park Golf Course on the current terms which apply other than as detailed in the Exempt Appendix to the report of the Cobtree Officer, for the reasons set out in the report;

2.  That the Head of Legal Services be given delegated authority to agree a supplemental agreement with the current operator in relation to this extension; and

3.  That the Officers be given authority to investigate the options for future arrangements being considerably longer term in respect of Cobtree Manor Park Golf Course and to report back to the Committee with recommendations.

The current contract to operate Cobtree Manor Park Golf Course was awarded to Mytime Active (“Mytime”) following a comprehensive tender process in 2009.  This 5 year contract expires on 8 January 2014. (“the contract”).

The contract stipulated an initial period of 5 years with a possible 5 year extension on the same terms.  Mytime had implied from the start of the contract that it had intended to take the 5 year extension until early this year when it asked to renegotiate as it did not consider the current terms to be commercially viable any longer.

Following a number of meetings and negotiations with Mytime it became apparent in early September this year that a longer term agreement for the further 5 year period that was acceptable to Mytime was not going to be achievable.

Due to the lateness of this final decision in September 2013 by Mytime, and following discussions with both the Council's Procurement and Legal Sections, the Officers were faced with three options. These being:

Option 1

To close the Golf Course on 8 January 2014 and retender the contract to operate the Golf Course.  This would take a minimum of 6 months plus at least another 2 months for a new operator to mobilise.  In this time the Golf Course would be closed, not be maintained, not be delivering any revenue return to the Charity, and indeed be incurring costs for the basic maintenance to the Clubhouse and the Course (for example security and health and safety).

Option 2

For the Council to take the operation of the Golf Course back in house for at least 8 months to allow re-tendering to take place.  This would not only involve acquiring golf course maintenance and catering plant and machinery, it would also be necessary for staff currently working at the Golf Course to be TUPE’d to the Council for 8 months and then again be transferred to another operator following the tender process.  This process would be disruptive to customers, expensive, time consuming and very unsettling for staff.

Option 3
To come to an agreement with the existing operator for it to continue to run the Course for a further year, which will give the Officers the time to carry out the tender process.

Option 3 as the preferred option was discussed with Mytime, who confirmed that they would be prepared to run the Golf Course for an additional year.  However, they would not be prepared to do this at a financial loss to Mytime (which is itself a company limited by guarantee and a registered charity).

A summary of the financial performance of Cobtree Manor Park Golf Course for the first three years of the contract and estimates of performance this year and next are shown in the Exempt Appendix (Item 2) to the report of the Cobtree Officer.

Mytime produced its audited accounts which were scrutinised by the Charity’s accountant and verified as accurate.  These audited accounts show a decreasing income which has led Officers to recommend that accepting a reduced contract sum as shown in the Exempt Appendix (Item 1) for one year is the best of the three options.

The contract with Mytime has a profit share arrangement, as set out in the Exempt Appendix (Item 3).  This arrangement will remain in the contract and will ensure that if the Golf Course has a far better than expected year in 2014 then the Charity will share in this additional income.

All evidence seen by the Officers suggests that the golf market has changed considerably in the last 5 years, and that it is likely that if a similar tender process to that carried out in 2009 were to be carried out now, then it is likely that future contract sums paid to the Charity will be considerably reduced.

For this reason it is proposed that the Officers investigate looking for future arrangements to be considerably longer term.  This will allow parties interested in operating Cobtree Manor Park Golf Course time to see a return on any capital investments they make and indeed consider complementary and alternative uses to sit alongside the Golf Course, such as hotels, wedding functions and the like.  This should result in more ambitious proposals being received, leading to better returns for the Charity.

The Committee could have chosen to go with options 1 or 2, but these are not considered to be in the best interests of the Charity, the staff or the users and members of the Golf Course.