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, '!) ~ SM CIVIC CENTER• 18125 BLOOMFIELD AVENUE ' 111 P.O. BOX 3130 • CERRITOS, CALIFORNIA 90703-3130 • TO:
FROM:
INITIATED BY:
DATE:
SUBJECT:
BACKGROUND
PHONE: (562) 860-031 I • CERRITOS.GOV
AGENDA REPORT
Honorable Mayor and Members of the City Council
Robert A. Lopez, City Manager r 'ffL_.
2008
Kristin Aguila, Assistant City ManagerJ.l.~.,'~
Annie Hylton, Director of Community ah..,..c:PCultural Services Samir Patel, Recreation Services Superintendent4-j>
July 27, 2026
REVIEW AND CONSIDERATION OF THE FEASIBILITY AND
POTENTIAL IMPACTS OF OUTSOURCING THE OPERATIONS AND
MAINTENANCE OF THE CERRITOS IRON-WOOD NINE GOLF
COURSE TO A PRIVATE OPERATOR
The findings of the Cerritos Resident Budget Task Force (RBTF) were presented to the City Council during its regular meeting on May 11, 2026. The report noted that during the RBTF Meeting #3, an interactive voting exercise was held. Through this exercise, the RBTF identified targeted cuts yielding estimated annual cost savings between $5.3 million and $6.8 million. The report noted the following key RBTF consensus outcome regarding the Cerritos Iron-Wood Nine Golf Course:
Privatizing Golf Course Operations (14 in favor of 15 present): Recognizing that the Cerritos Iron-Wood Nine Golf Course operates at an annual loss (an amount which one RBTF member noted was between $300,000 to $900,000), an overwhelming majority supported evaluating a contract operations model and going to RFP (privatization or third-party professional management) to completely remove the facility as a cost center for the City. It is worth noting that some of these losses were during years in which the golf course was non-operational because of a gas leak. The City did receive compensation from the responsible party for the losses associated with the gas leak. To remove costs for the City, the task force strongly supported exploring contract/private operations for the Cerritos Iron-Wood Nine Golf Course (14 in favor).
During a special Cerritos City Council meeting on May 28, 2026, the City Council directed the City Manager to provide a report, for City Council review and consideration, on the feasibility and potential impacts of outsourcing the operations and maintenance of the Cerritos Iron-Wood Nine Golf Course to a private operator.
FINDINGS
The Cerritos Iron-Wood Nine Golf Course opened in 1977. The 29-acre, nine-hole executive golf course is located adjacent to the Los Coyotes Water Reclamation Plant operated by the County Sanitation District No. 2 of Los Angeles County (District). The $682,000 cost to LYNDA P. JOHNSON
MAYOR
MARK E. PULIDO
MAYOR PRO TEM
JENNIFER HONG
COUNCILMEMBER
SOPHIA M. TSE
COUNCILM EMBER
FRANK AURELIO YOKOYAMA
COUNCILMEMBER
2 Outsourcing Golf Course Operations and Maintenance
July 27, 2026
develop the golf course was funded by the former Cerritos Redevelopment Agency. The course is irrigated with reclaimed water from the adjacent Los Coyotes Water Reclamation Plant.
Lease Agreements
On June 19, 1975, the City of Cerritos entered into a lease agreement with the County Sanitation District No. 2 of Los Angeles County for two parcels owned by the District.
Cerritos Iron-Wood Nine Golf Course was constructed on the parcels. Under the terms of the agreement, the District leased the property to the City at no cost for the duration of the agreement. Over the years, the lease has been extended through a series of amendments to the agreement. The current lease will expire on November 16, 2035, with an option to extend for an additional five (5) years. The lease notes that the Sanitation District has determined the premises will likely not be needed for expansion or improvement of the Los Coyotes Water Reclamation Plant during that time; however, circumstances may change, and the Sanitation District may terminate the City's rights to use all or a portion of the leased premises. In addition, the agreement restricts the City's ability to sublease the premises without prior consent of the District, pursuant to the agreement as follows:
Except for the Communications Tower Sublease, the City shall not sublease or sublicense any other part of the Leased Premises without the prior written consent of the District, which may be withheld in the District's sole and absolute discretion. The consent by the District to one subtenant shall not be deemed to be consent to any subsequent subtenant or sublicensee.
The City also has a license agreement with Southern California Edison (SCE) for an easement in and around the Golf Course. Pursuant to the agreement, the property must be used for "public golf course purposes only." The current agreement will expire on December 31, 2030. The agreement stipulates payments by the City to SCE in the following amounts:
$55,796.10 in 2026; $58,585.90 in 2027; $61,515.20 in 2028; $64,590.96 in 2029; and $67,820.50 in 2030.
City staff has spoken to representatives of the District and SCE about the feasibility of the City either subleasing the golf course or hiring a third-party operator to manage its operations. While neither organization expressed initial opposition to the concepts, subleasing the golf course would require the City to obtain written consent from the District and SCE prior to executing an agreement with a third-party operator.
In addition to receiving prior written consent, a condition requiring the City to pay the District a portion of the revenue received from an existing on-site Communications Tower Sublease was added by the District to the most recent lease agreement as follows:
As a condition to the District's consent to an extension of the Communications Tower Sublease term beyond December 31, 2026, the City, as sublessor, shall require Sublessee to pay fair market value rent, with annual increases based on the change in the Consumer Price Index ("CPI"), for the Subleased Premises during any extended term based on an independent third-party appraisal commissioned and paid for by the City. Immediately upon procuring such appraisal, the City shall provide a true and correct copy of same to the District. During any extension term of the Communications Tower Sublease, the City shall pay to the District on the first day of each calendar month commencing on the first day of the calendar month of 3 Outsourcing Golf Course Operations and Maintenance
July 27, 2026
the extended term of the Communications Tower Sublease an amount equal to 50% of the Consideration payable by Sublessee to the City.
Reference to "Consideration" shall mean and refer to any and all money, rent or increased rent, services, any "key'~ security or other deposit or payment, property, or any other thing of value and any other fee, charge, payment, forbearance, or compensation whatsoever. In no event shall the term of the Communications Tower Sublease exceed the term of the Lease. Provided that the District consents to an extension of the term of the Communications Tower Sublease, such term extension, Sub/essee's requirement to pay increased fair market value rent with annual CPI adjustments, the City's obligation to pay 50% of the Consideration to the District as set forth above, and any other terms or conditions imposed by the District shall be confirmed and memorialized in an amendment to the Consent to Sublease dated March 26, 1997 (in form and content acceptable to the District) which shall be agreed to and acknowledged by Sub/essee and the City, as sublessor.
It is therefore anticipated that as a condition of allowing the City to amend its lease to a private company to operate the golf course, the District may require the City to pay the District a percentage of any golf course revenues received from a private operator.
Golf Course Services and Revenues
The Cerritos Iron-Wood Nine Golf Course offers a nine-hole golf course and a driving range with lighting. The golf course is open daily from sunrise to sunset. Cerritos residents and seniors receive a discount on green fees. The City offers golf lessons and tournaments at the facility for community members of all ages. Golf course usage statistics for the 2025- 2026 Fiscal Year are as follows:
Activity Total
Number of classes and soecial events 561 Number of rounds of aolf 55.892 Drivino ranae oarticioants 93.322
Golf course revenues for the 2025-2026 Fiscal Year total $1,121,851. The fee amounts charged during the 2025-2026 Fiscal Year are listed below.
Current Green Fee Schedule
Resident Resident Resident Non- Non- NonAdult Junior Senior Resident Resident Resident Adult (18 Junior (18 Senior
and older) and under)* (60 and
older)
Monday- $11.00 $7.50 $8.00 $13.00 $8.50 $9.00
Fridav
Weekends $12.00 $7.50 $8.00 $15.50 $8.50 $9.00
and
Holidavs
*Rate applies to juniors, age 18 (in high school with a valid high school ID) or younger. 4 Outsourcing Golf Course Operations and Maintenance
July 27, 2026
Current Drivin e Fee Schedule
Small Bucket 50 Balls 7.00
Lar e Bucket 100 Balls 10.50
Value Card 650 Balls 50.00
On October 25, 2007, the City Council adopted a resolution declaring the adoption of the 1st Combat Engineer Battalion (CEB), United States Marine Corps, Camp Pendleton, California.
Since that time, the City has provided the 1st CEB and the 1st Combat Engineer Battalion Adoption Committee with special consideration related to the golf course. The City provides free golf course passes to United States Marine Corps Meritorious Marines recognized by the 1st CEB. The City also provides complimentary use of the golf course for the annual 1st CEB Golf Classic organized by the 1st Combat Engineer Battalion Adoption Committee. Proceeds from the tournament benefit United States Marines and their families.
Golf Course Staffing, Operations, and Maintenance Costs The golf course is operated by the Community and Cultural Services Department, Recreation Services Division staff and maintained by the Public Works Department, Parks and Trees Division.
Recreation Services Division
The Recreation Services Division oversees the daily operation of the golf course, including managing tee times, scheduling lessons and tournaments, and all marketing activities. The Adopted Combined Financial Program 2026-2027 budget includes 11.5 full-time equivalent Recreation Services positions assigned to the golf course. This includes one full-time Recreation Services employee and 18 part-time Recreation Leaders, at levels II, III, and IV.
The total Recreation Services golf course expenses in the 2026-2027 budget, including operation and personnel expenditures, is $740,423.
Parks and Trees Division
The Parks and Trees Division oversees the maintenance of the golf course, including turf management of greens and fairways, maintenance of irrigation infrastructure, and trash and debris removal. The 2026-2027 budget includes three full-time Parks and Trees Division staff positions assigned to the golf course, including a Parks Maintenance Leadworker, Parks Maintenance II, and Parks Maintenance I. The total Parks and Trees Division golf course expenses in the 2026-2027 budget, including operation and personnel expenditures, is $700,585.
The payment to SCE for use of its easement at the golf course will total $58,585.90 in the 2026-2027 Fiscal Year.
The grand total allocation in the Adopted Combined Financial Program 2026-2027 budget for golf course personnel, lease payments, operations, and maintenance expenses is therefore $1,499,593.90. The 2026-2027 budget does not include any capital improvement program funds for golf course projects.
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July 27, 2026
The net operating budget for the golf course, inclusive of personnel and operation expenses, is listed in the table below.
Revenue and Expense Summarv
Total Revenue $1.121.851
Total Recreation Services Division Exoenses $740.423 Total Parks and Trees Division Exoenses $700.585 SCE Pavment $58 585.90
Total Expenses $1.499.593.90
Net Difference ($377,742.90)
City and County Golf Courses with Private Operators
Staff conducted a survey of several Southern California cities and Los Angeles County regarding their public golf courses that operate under third-party management agreements.
The survey collected information about the structure of the agreements, the scope of services provided by the third-party operators, the fee structure, and whether the courses operated with net positive revenue or negative expenses to the city or county (Exhibit 1).
Outsourcing Considerations and Steps
Outsourcing the operations of the Cerritos Iron-Wood Nine Golf Course requires several considerations. Changes in the golf course's operations that affect represented City staff would require the City to meet and confer with representatives of the City Employee Union.
The City would also need to seek approval from the District and SCE to amend its lease agreements.
Determining the potential revenues or expenses for outsourcing the golf course's operations would require the preparation and dissemination of a request for proposals. In compliance with Assembly Bill 339, the City would first need to notify the City Employee Union of its intent to issue a request for proposals prior to its dissemination. The request for proposals would include a description of the golf course, historical financial data, golf course use statistics, the scope of work, and an agreement with stipulations for the following:
• Golf course and driving range hours of operation • Discounted fees for Cerritos residents and seniors • Tee time management
• Requirements for providing equipment rentals and merchandise sales • Customer service standards
• Turf and grounds maintenance standards, including mowing frequencies, fertilization, aerification, pest control, and irrigation system management • Janitorial services standards • Netting maintenance standards • Insurance and indemnity requirements
• Performance bond in an amount specified by the City • Compensation structure specifying either a fixed annual lease/management fee or a percentage of gross revenues
• Compliance with the terms of the District and SCE leases • Compliance with any closure requirements for periodic monitoring-well testing • Compliance with the terms of the Master Joint-Use Agreement for Use of Shared Sites with the ABC Unified School District
• Golf course operating expenses and revenues reporting on a monthly basis 6 Outsourcing Golf Course Operations and Maintenance
July 27, 2026
• Reimbursement to the City of utility costs
• Funding of capital improvements
• Allocation of course time for use by the City to host tournaments or special events • Requirements for a certain number of complimentary gift passes and tournament uses
• Contract duration and options for extensions
Proposers would be required to provide the following information:
• Experience operating and maintaining public golf courses • Audited financial statements or evidence of sufficient working capital to sustain operations and fund capital improvements
• A list of municipal golf course client references with contact information • Golf course organization chart with number of staff assigned to each position • Resumes of the proposed Operations Manager and Maintenance Superintendent • Proof of insurance meeting the coverage amounts established by the City • Proposed fees for rounds of golf, driving range, and tournament rentals • Schedule for capital improvements
• Plan for marketing and community engagement
• Description of staff training to ensure the provision of outstanding customer service • Proposals for food and beverage services
• Plan and timeline for transitioning operations and maintenance from the City to the proposer
A mandatory pre-proposal meeting would be scheduled for staff to lead potential proposers on a tour of the golf course and facilities and provide them with an opportunity to ask questions about the project. It is anticipated that the issuance and award of a request for proposal, and amendments to the lease agreements with the District and SCE, would take a minimum of eight months to complete, following all required meet and confer processes with the City Employee Union.
Additional Considerations
As an alternative to contracting with a third-party golf course operator, the City Council could review findings from a study and consider increasing all golf course fees to generate additional revenue. Periodic fee adjustments are a common practice among municipal golf courses and help offset increases in labor, maintenance, and other operating costs. The golf course's most recent fee adjustment took effect in January 2023. A fee comparison of local nine-hole public golf courses is attached (Exhibit 2).
As shown on Exhibit 2, when compared with similar public nine-hole golf courses in the surrounding area, Cerritos Iron-Wood Nine Golf Course's current fee structure is below market rates. Based on current revenue and expense levels, it is projected that a fee increase of approximately 30 percent would be required to bring the golf course closer to a break-even operating position while maintaining its competitiveness with similar facilities.
Additionally, to help address future increases in operating costs, the City Council could consider establishing a fee adjustment that allows for periodic increases tied to the Consumer Price Index (CPI) or another appropriate inflationary measure. This approach would provide a predictable and transparent mechanism for maintaining alignment with operational expenses.
7 Outsourcing Golf Course Operations and Maintenance
July 27, 2026
A final consideration involves a pending sewer infrastructure project that is being planned by the District. The project will require a portion of the driving range to be closed for an extended period. The timing, duration, and operational impact of the construction will need to be considered when planning the issuance of a request for proposal. Staff is currently awaiting additional information from the District regarding the anticipated start date of the project.
FISCAL IMPACT
The fiscal impact for outsourcing the operations and maintenance of the Cerritos Iron-Wood Nine Golf Course could be determined if the City issues a request for proposals.
RECOMMENDATION
It is recommended that the City Council:
1. Review and discuss the feasibility and potential impacts of outsourcing the operations and maintenance of the Cerritos Iron-Wood Nine Golf Course to a private operator;
2. Review and discuss continuing City operation of the Cerritos Iron-Wood Nine Golf Course and direct staff to prepare an agenda report with information from a study on the golf course's fees and potential consideration of increasing the golf course fees as an initial measure to mitigate operating losses;
3. Receive public comment; and
4. Direct staff accordingly.
Exhibits:
1. Survey of Public Golf Courses with Third-Party Operators
2. Comparison of Local Nine-Hole Golf Course Fees
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Municipality
Anaheim
Brea
Fullerton
Hesperia
Huntington
Beach
La Mirada
Lakewood
Long Beach
Norwalk
Course Name and Type
Anaheim Hills Golf Club,
Dad Miller Golf Course
18-hole Courses
Brea Creek Golf Course,
Birch Hills Golf Course
18 and 9-hole Courses
Fullerton Golf Course
18-hole Course
Hesperia Golf Course
& County Club
18-hole Course
Meadowlark Golf Club
18-hole Course
La Mirada Golf Course
18-hole Course
Lakewood Country Club
18-hole Course
El Dorado, Heartwell,
Recreation Park 18 & 9,
Skylinks
18 and 9-hole Courses
Don Knabe Golf Center
9-hole Course
City of Cerritos
Survey of Public Golf Courses with Third-Party Operators Third-Party Contract Positive Net
Ownership Operator Type Services Provided Fee Structure Revenue or Negative Operating Expense
All day-to-day operations, City pays a including maintenance, City American Golf Management marketing, and employee Management Fee + Positive Net Revenue hiring. Incentives
All day-to-day operations, City pays a City Western Golf Management including maintenance, Properties marketing, Management Fee + Positive Net Revenue and employee hiring. Incentives
All day-to-day operations, City pays a City CourseCo Management including maintenance, Management fee + Positive Net Revenue marketing, and employee hiring. Incentives
All day-to-day operations,
City Donovan Bros. Management including maintenance, City pays a Negative Operating marketing, and employee Management Fee Expense
hiring.
All day-to-day operations,
City Arcis Golf Lease including maintenance, Company makes Lease Positive Net Revenue marketing, and employee Payments to t he City hiring.
All day-to-day operations, Company pays a Positive Net Revenue Los Angeles including maintenance, or Near Break-Even.
County American Golf Lease marketing, and employee Percentage of Gross Individual Golf Course
hiring. Revenue to the City Revenue Unavailable
All day-to-day operations, Company pays a Posit ive Net Revenue Los Angeles American Golf Lease including maintenance, Percentage of Gross or Near Break-Even.
County marketing, and employee Revenue to the City Individual Golf Course hiring. Revenue Unavailable
All day-to-day operations, Company pays a City American Golf Lease including maintenance, marketing, Percentage of Gross Positive Net Revenue and employee Revenue to the City hiring.
All day-to-day operations, Company pays a Positive Net Revenue Los Angeles including maintenance, or Near Break-Even.
County American Golf Lease marketing, and employee Percentage of Gross Individual Golf Course
hiring. Revenue to LA County Revenue Unavailable
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Municipality
Cerritos
Brea
Cypress
Long Beach
Norwalk
Pico Rivera
City of Cerritos
Comparison of Local Nine-Hole Golf Course Fees
Weekday Weekend Weekday Weekend
Course Name Resident Resident Non-Resident Non-Resident Adult Fee Adult Fee Adult Fee Adult Fee
Cerritos Iron-Wood Nine $11.00 $12.00 $13.00 $15.50 Golf Course Brea Creek Golf Course $23.00 $25.00 $23.00 $25.00
Navy Golf Course $21.00 $23.00 $21.00 $23.00
Recreation Park 9 $15.50 $18.75 $22.50 $26.25
Don Knabe Golf Center $8.50 $9.75 $8.50 $9.75
Pico Rivera Golf Club $12.36 $14.42 $15.45 $18.54