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File Number: 20-174 $70,000 per month. If the proposed management agreement is approved, staff will develop a new 5-year CIP proposal for future City Council consideration (the previous CIP projects list covered 2015 - 2019). Based on the initial Annual Plan provided by AGC (Appendix B of the management agreement), the City is anticipated to realize a net profit of $715,056 for this initial plan period (June 1, 2020 through June 30, 2021). This anticipated net revenue amount is approximately 26% less than the City’s share of 2019, which was $965,573. The difference in projected revenue is due in part to the fact that under the existing Lease Agreement, AGC was exempt from the City’s Living Wage Ordinance (the 1997 Agreement was in existence prior to adoption of the Living Wage Ordinance), and under the management agreement, living wage would apply (approximately $130,000 difference). Additional factors include the static management fee ($150,000) to be paid to AGC, whereas in the past several years AGC operated at a loss. Staff also estimates approximately $55,000 more for insurance costs. The difference between rental income of $965,573 the City received under the Lease Agreement and the anticipated net profit from golf course operations of $715,056 will have an anticipated negative impact of $250,000 on the Shoreline fund. Although AGC worked hard to maximize golf revenues, including the addition over the past few years of Foot Golf and Disc Golf on the 9-hole course, it is anticipated that over the next 2-3 years, as the 9-hole course is closed for reconstruction, net revenues will temporarily decline. Plans are in place to offer 9-hole play at a reduced rate on the Tony Lema course during the interim construction period, but the overall number of players is anticipated to temporarily decrease. PREPARED BY: Debbie Pollart, Director, Public Works Department David Sams, City’s Golf Consultant Page 5 City of San Leandro Printed on 5/28/2020 138