Agenda packet — Madera City Council, August 20, 2025 (part 4 of 4)

F3: The MCGJ finds that the record-keeping requirements of the Lease are not being met.

Response 3: The City partially agrees with the finding. The City has records pertaining to Capital Projects and revenues to the City, but lacks records pertaining to the United States Golf Association.

F4: The MCGJ finds that the City appointed the Parks Director to coordinate with Sierra for this golf course planning and oversight role.

Response 4: The City agrees with this finding. The City’s Director of Parks & Community Services is responsible for coordination and oversight of the Municipal Golf Course.

F5: The MCGJ finds that the City has failed to exercise reasonable oversight and enforcement over the golf course maintenance and capital improvements.

Response 5: The City partially disagrees with the finding. The finding, as written, provides insufficient information to either agree or disagree, as the term, “reasonable oversight and enforcement” is unclear.

While not mentioned in Finding 5, the narrative of the Report alludes to sand. The respondent is assuming that this finding is relative to said item. If so, Section 16 of the 2009 Agreement notes that SGM shall be responsible for providing sand; whereas Section

5.6 of the Sixth Amendment notes:
“[S]aid capital improvements shall include repairing of drainage and renovation of 11 bunkers on the course. Said costs includes [sic], but is not limited to materials, equipment, and labor.”
Thus, while additional clarity may be desired, it is clear that the renovation of the bunkers for drainage improvement was deemed an appropriate expense.

More recently, the City did not mandate that the $15,000 connection be made to the Madera Irrigation District line as required by the 6th Amendment. This item was determined to be redundant and would not add water capacity by the City, Sierra Golf Management, Inc. (SGM), and/or Madera Irrigation District, thus said funds were reappropriated to other more pressing water infrastructure. Said reallocation of the $15,000 to add water capacity was approved by the City Council on June 21, 2023, as part of the 9th Amendment to the Agreement.

In terms of capital improvements, Section 34.6 of the original 2009 Agreement indicates:

All records provided for in this section are to be maintained and made available throughout the performance of this Agreement and for a period of not less than five (5) years, additionally any and all such records which pertain to actual disputes, litigation, appeals or claims shall be maintained and made available for a period of not less than five (5) years after final resolution of such disputes, litigation, appeals or claims.

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Said records are available for public viewing.

F6: The MCGJ finds that the Lease requires that logos and name “Madera Municipal Golf Course” must always be used for all signage, announcements, menus, events, websites, etc. The MCGJ finds that the logos and word “Municipal” have been often omitted from required usage.

Response: The City agrees with this finding. The City will address this with SGM.

F7: The MCGJ finds that use of the golf course kitchen for catering from the golf course, is offered on both Sierra and Sugar Pine websites. Catering from the golf course is Prohibited and is a breach of the Lease.

Response 7: The City agrees with this finding. It is noted that Section 7.13 of Agreement states:
“…Unless agreed upon in writing, Sierra agrees to limit it's services under this agreement to the facilities at the Golf Course and will not under the auspices of this agreement provide catering services off.”
As part of 9th Amendment, adopted by the City Council on June 21, 2023, this section was amended to read:
“Sentence 2 of Paragraph No 2 is deleted in its entirety and replaced with “Should SPS [Sugar Pine Smokehouse] vacate the clubhouse, the City, and SGM will work together to procure a new operator””
Thus, as part of the 9th Amendment, the prohibition against catering for off-site events was removed.

F8: The MCGJ finds that in 2021-23 the City gave Sierra unnecessary financial concessions due to the Covid-19 pandemic.

Response 8: The City disagrees with this finding. This finding neglects to recognize the immense uncertainty caused by the COVID-19 pandemic. In a report to the City Council on April 15, 2020, at the onset of the pandemic, City staff noted:
“The City and SGM were close to finalizing these terms last month when the COVID-19 pandemic began to emerge in the United States. The COVID-19 pandemic has had a negative impact on local economies, leaving SGM uncertain of long-term effects this may have on operations and reduction to revenues.

SGM indicated to the City that they could not move forward with the terms of a new agreement due to the unknown variables at this time.” At the time, the City’s agreement with SGM was set to sunset on April 30, 2020, and the City was not in a position to resume responsibility for the operations and maintenance of the golf course. As noted in Response 1, the City was responsible for servicing debt and a comprehensive review of the City’s adopted 2019/20 Operating Budget, and subsequent budgets, support the City’s position that it is unable to resume responsibility without

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reallocating substantial monies from other funds. For example, as an alternative, the City could have reallocated monies from other funds, such as General Fund dollars from the Fire or Police Departments, but this would have been irresponsible and would have altered the City’s service delivery model that the community has come to expect.

In addition, the respondent disagrees with the underlying inference that this reduction was somehow inappropriate. The respondent questions the basis of this finding, as this statement does not provide:
▪ Any evidence
▪ Indication of a study or reference to underlying data that defines “unnecessary” ▪ A reasonable alternative
A review of the record clearly demonstrates that the pandemic was a global crisis with significant economic impacts. In a report to the City Council on March 18, 2020, over one month prior to Amendment 5, the City proclaimed a local emergency due to the imminent threat of COVID-19. This declaration was consistent with National, State, and County states of emergency.

The report continues by noting that:
“[T]he exact modes of transmission, the factors facilitating human-to-human transmission, the extent of asymptomatic viral shedding, the groups most at risk of serious illness, the attack rate, and the case fatality rate all remain active areas of investigation.”
In short, the City was not in a position to resume responsibility given the uncertainty of the pandemic. The purpose of the concessions was an attempt to maintain the golf course in operating condition.

F9: The MCGJ finds that Lease section 4.4 unnecessarily excludes the City from receiving any revenue from the described activities.

Response 9: The City disagrees with this finding. The observation that the City excluded itself from receiving any revenue from the described activities is accurate; however, the respondent disagrees with the underlying inference that this fee practice is somehow inappropriate.

Moreover, staff that was involved during the original 2009 Agreement have separated from the City, thus any direct response to counter with rationale would be speculative.

Under the established structure, the City receives a Base Rent, compensating for additional activities.

F10: The MCGJ finds that there are no United States Golf Association [USGA] reports as required by the Lease.

Response 10: The City agrees with this finding. After additional research, SGM acknowledged that they have not contracted with USGA since the agreement was ratified in 2009. Since then, USGA visited the golf course on July 21, 2023. USGA provided a written report which was presented to the City Council on August 2, 2023. This report is attached as Attachment 1.

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RECOMMENDATIONS:

R1: The MCGJ recommends that the City Finance Director correct and clarify all budget entries by December 31, 2023.

Response 1: The respondent is under the assumption that this recommendation pertains to the payment from the Golf Course to the Airport. If so, this recommendation has been addressed.

Staff became aware that the Golf Course Fund does not contain appropriations in the Fiscal Year 2022/23 Annual Operating budget to cover the rent payment to the Airport Fund. The payment of $64,083 is made to the Airport Fund as it is the legal owner of a portion of the property on which the golf course resides. To remedy this, at its June 21, 2023, City Council meeting, the Council approved an appropriation through a budget amendment.

R2: The MCGJ recommends that the City of Madera immediately rewrite a new contract for the lease, management, and operation of the Madera Municipal Golf Course.

Response 2: At its June 21, 2023, the day after the Grand Jury submitted its Report to the City, the City Council approved a five-year contract extension. In accordance with the Brown Act, the documents considered by City Council were published on June 17, 2023, days prior to the Grand Jury Report. While the City acknowledges that a contract absent items the Grand Jury considers obsolete may not be ideal, the contract is a legally binding document.

Regardless, the City and SGM have discussed updating the contract.

R3: The MCGJ recommends “Detailed” records of Capital Improvements and Maintenance expenditures and the USGA advice reports, be kept by the City for public viewing and for at least five years or as required by law.

Response 3: This recommendation has been partially implemented and will be ongoing. The City has a long-standing policy relating to the retention of records in conformance with state law; however, the City understands the MCGJ request for greater detail. Moreover, the City prides itself in aiming to be transparent in governance and management of the City. This includes adhering to requests for public documents when requested by the community and all other Public Records requests, per the Public Records Act.

In terms of USGA advice reports, the initial report was made available to the public on August 2, 2023.

R4: The MCGJ recommends that Parks Director or other City Representative immediately begin to monitor and exercise oversight over the golf course Capital Improvement and Maintenance expenditures.

Response 4: This recommendation has been implemented and will be ongoing. Moreover, the 9th Amendment established a Golf Course Committee comprised of:

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1. One City Council member

2. Director of Parks & Community Services

3. SGM Representative

4. Service Organization Representative

5. Golfer/At -large Community member

6. Food and Beverage Director/Representative

7. At-large Community member (added during the City Council meeting on June 21, 2023)
The Committee is expected to provide oversight on capital improvements and maintenance. In addition, the 9th Amendment requires that the City collect capital improvement funding and reimburse SGM for eligible activities. This is in contrast to the historic practice where SGM would submit receipts to the City.

R5: The MCGJ recommends that the City immediately specify the Maintenance and Capital Improvement categories as defined by USGA to eliminate confusion as to what Sierra is paying and/or has paid for golf course Capital Improvements and Maintenance.

Response 5: USGA visited the golf course on July 21, 2023 and prepared a list of recommendations.

The report was presented to the City Council on August 2, 2023 and will be shared with the Golf Course Advisory Committee at their upcoming meeting.

R6: The MCGJ recommends that the City immediately enforce the Lease provisions requiring the word ‘Municipal’ and all other name and logo requirements.

Response 6: This recommendation has been implemented and will be on-going.

R7: The MCGJ recommends that the City immediately review its position on catering. When making any decision, the City should determine its original purpose for prohibiting offsite food service and catering. City should enforce the agreement or allow the use.

Response 7: The recently approved 9th amendment permits offsite catering. This item was reviewed during recent negotiations and the City cannot determine why said prohibition was originally included.

R8: The MCGJ recommends that the City immediately negotiate for concessions it made during Covid-19. The City should consider increasing its share of revenue by participating in all of Sierra’s income excluded from the City in Lease Section 4.4.

Response 8: On June 21, 2023, the City Council approved the 9th Amendment which outlines how much SGM pays the City to operate the Golf Course. As part of the 9th Amendment, the amount that SGM remits to the City for base rent and per round of golf exceeds what it paid prior to the COVID-19 Pandemic.

R9: The MCGJ recommends that a new Lease be drafted immediately deleting all obsolete terms which unnecessarily exclude the City from City revenue.

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Response 9: Given that the recommendation does not identify specifics, the City does not have adequate information to ascertain what obsolete terms this is regarding. Per Finding 2, it is apparent that the Madera County Grand Jury considers Exhibits A and B from the original 2009 Agreement obsolete; however, drafting a new agreement to strike two exhibits appears excessive. In addition, on June 21, 2023, the City Council approved the 9th Amendment, a five-year extension. Notwithstanding this, both parties have discussed preparing a consolidated agreement.

R10: The MCGJ recommends that the City should immediately make the USGA mandatory annual reports available for public review.

Response: This report was presented to the City Council on August 2, 2023 and is attached.

We thank the Grand Jury for its service to the community. Please let us know if you or the Grand Jury need additional information.

Sincerely,
Arnoldo Rodriguez
City Manager
City of Madera
c: Foreperson, Madera County Grand Jury, PO Box 584, Madera, CA 93639 Attachments:

1. Report to the City Council dated August 2, 2023, including report from the USGA Attachment A: Report to the City Council dated August 2, 2023, including United States Golf Association ƌĞƉŽƌƚ

REPORT TO CITY COUNCIL
Approved by: Council Meeting of: August 2, 2023
Agenda Number: ___________
________________________________
Joseph Hebert, Parks & Community Services Director
_________________________________
Arnoldo Rodriguez, City Manager
SUBJECT:

Informational report on USGA Site visit to the Madera Municipal Golf Course RECOMMENDATION:

This report is submitted for informational purposes only and there is no action requested from the City Council (Council)
SUMMARY:

During the June 21, 2023 Council meeting staff presented the Ninth Amendment to the Madera Municipal Golf Course Operation and Management Lease Agreement with SGM Inc. dba Sierra Golf Management, Inc. There is a provision in the original 2009 contract requiring an annual audit be conducted by the United States Golf Association (USGA); however, the report had not been previously prepared.

The staff is providing this report to inform Council that the USGA annual audit provision has been satisfied.

DISCUSSION:

On July 21, 2023, the USGA conducted its first audit of the Madera Municipal Golf Course. The audit findings were generally favorable. The course is over 30 years old and in good shape, except for several items requiring upgrades or general maintenance.

Recommendations made by USGA are presented below:

1. Upgrade Irrigation System

2. Increase Weed Control

3. Putting Greens – increase sand dilution and decrease surface patch.

4. Bunker renovation

5. Upgrade to hybrid Bermudagrass
The establishment of a seven (7) member golf committee was approved by Council during the July 19, 2023, meeting. The USGA recommendations will be scheduled for discussion during the Committee’s upcoming.

FINANCIAL IMPACT:

Funding for Golf Course Capital improvement projects will be generated by revenues outlined within contract amendment nine.

ALTERNATIVES:

This is an informational item only.

ATTACHMENTS:

1. USGA Site Visit Report for Madera Municipal Golf Course 21 July 2023 Brian Whitlark | Regional Director, West Region | (480) 215-1958 | [email protected] Madera Municipal Golf Club
Madera, California
Visit Date: July 21, 2023

Present:

Jeremy Jordan, Golf Course Superintendent
Dan Bacci, Sierra Golf Management
Jon Christensen, Sierra Golf Management
Brian Whitlark, USGA Green Section

COURSE CONSULTING SERVICE
Site Visit Report
2 Executive Summary
Thank you for the invitation to conduct the first Course Consulting Service visit to Madera Municipal Golf Course on behalf of the USGA Green Section. The purpose of the Course Consulting Service is to collect and distribute information on the proper construction and maintenance of golf courses. Each visit offers an impartial yet concerned perspective regarding turfgrass growth requirements, practical information on maintenance practices to address your needs, and sharing information from other courses that we visit that may be helpful to your operation. This information is provided free of bias since the USGA is not affiliated with manufacturers or suppliers. In short, we are a tool to help your superintendent and management team provide better turf for better golf.

This was my first visit to Madera Municipal Golf Course. The golf course is about 30 years old, and it is clear that there have been no capital improvement projects completed at the golf course. The infrastructure of the golf course is aging, and the most important topic of this report will be the need to upgrade components of the irrigation system. We will also discuss the importance of significantly increasing weed control efforts. A brief summary of the topics discussed in this report is included below:
• Irrigation system. Despite a significant reduction in irrigated turf, the irrigation system is insufficient to properly deliver water adequately and efficiently to this golf course. It is recommended for the City to consider significant upgrades to the pump station and irrigation system at Madera Municipal Golf Course.
• Weed control. Weeds are a significant problem at this golf course, and weed control efforts need to be increased in primary playing areas such as green surrounds, fairways and tees. • Putting greens. The putting greens are in good health in general, but they are very soft and spongy. We will discuss increasing cultural practices to improve sand dilution and decrease surface thatch.
• Bunkers. The bunkers have exposed sumps which are unsightly and impact playability but do help to drain the bunkers during rainfall events. While not an immediate priority in my opinion, a bunker renovation should be considered in the future. • Bermudagrass upgrade. After upgrading the irrigation infrastructure, it is recommended to consider upgrading to hybrid bermudagrass, which could be sprigged to the fairways perhaps nine holes per year. This would improve golf course aesthetics and playability year-round. 3 Table of Contents
Irrigation................................................................................................................................... 4 Observations .............................................................................................................................. 4 Recommendations ..................................................................................................................... 5 Bermudagrass Upgrade.......................................................................................................... 6 Observations and Recommendations ......................................................................................... 6 Weed Control ........................................................................................................................... 7 Observations .............................................................................................................................. 7 Recommendations ..................................................................................................................... 7 Putting Greens......................................................................................................................... 8 Observations .............................................................................................................................. 8 Recommendations ..................................................................................................................... 8 Bunkers .................................................................................................................................... 9 Observations .............................................................................................................................. 9 Recommendations ..................................................................................................................... 9 Closing Comments.................................................................................................................. 9 USGA Green Section............................................................................................................. 10 Turfgrass and Environmental Research ................................................................................... 10 Tools and Solutions .................................................................................................................. 10 Green Section Record .............................................................................................................. 10 4 Irrigation
Observations

1. Antiquated System
The irrigation system is now over 30 years old. Most courses will replace irrigation satellites, sprinklers, lateral and mainline valves between year 15 and 25, and often courses will replace the entire irrigation system at year 30 to 35.

2. System Limitations
The irrigation system does not deliver water adequately and efficiently to this golf course. The system only delivers about 1,200 gallons per minute, which is only about 40% of what a typical golf course will pump out to an 18-hole golf course. This means not enough water can be delivered to the golf course during an evening irrigation cycle, and the time in which to apply water is 11 to 13 hours. A system with adequate pressure and flow could deliver more water in a window of only about six hours. The long water window creates wet conditions for golfers playing early in the morning and does not facilitate deep watering.

3. Multiple Sprinklers Per Valve
Most all golf courses I work with (approximately 90 golf courses per year) have the ability to control every sprinkler individually. At Madera, there are two to three sprinklers per station and, in some cases, five to six sprinklers per station. This means limited ability to apply site-specific water and results in inefficient use of water and overwatering.

4. Inconsistent Spacing
The spacing among the sprinklers is inconsistent, which results in localized wet and dry areas.

5. Valves Not Working
Mainline and lateral line valves are not working properly. This means that to conduct any repairs across the golf course, the team must shut off the pump station. During the summer months, this is a significant inconvenience and puts turfgrass throughout the golf course at risk of failure.

6. Pump Station in Poor Condition
The pump station is in very poor condition and is exposed to the elements.

7. No Independent Watering
It was great to see that irrigated turf was removed several years ago. It was reported that the team now irrigate only about 75 acres of turf compared to about 105 acres of turf several years ago. However, the sprinkler design is not set up to independently water only these 75 turf acres.

This means water is applied where it is not needed.

8. Poor Sprinkler Design Around Greens
There are full-circle sprinklers around greens, which means water must be applied to green surrounds and bunkers when greens are watered. Ideally, greens would be watered with partcircle sprinklers designed only for the greens to allow deep watering of greens without flooding bunkers.
5 Recommendations

1. System Component Replacement
At the very least, it is suggested to replace swing joints, sprinklers and irrigation satellites and add a central irrigation computer. This is the very minimum irrigation component replacement plan. This plan does not allow for redesigning irrigation spacing to accommodate the new turf lines and does not replace lateral line pipes which are more likely to fail in the next five to ten years. Below is an industry reference that provides the expected useful service life of irrigation components:
6 2. Pump Station Replacement
In Central California, the irrigation system is the lifeblood of every golf course and effectively is the most important part of the golf course. Without it, you do not have a golf course. Replacing the irrigation system components in conjunction with upgrading to hybrid bermudagrass would have a significant positive impact on the golfer experience for the long-term viability and sustainability of this golf course. It is strongly recommended to replace the pump station with a system that is capable of delivering at least 2,500 gallons per minute. • You may wish to reach out to Cloudburst Engineering in Palm Desert to assist with the pump station replacement.
• It is also strongly recommended to reach out to in irrigation designer such as BTG Golf LLC for consultation on the system hydraulics. It is critical to size the pipe properly leaving the pump station and throughout the golf course to provide adequate flow. • Below I have included several articles on the importance of replacing the irrigation system. ♦ How Do We Know When It Is a Good Time to Replace Our Irrigation System? ♦ How Long Does an Irrigation System Last?
♦ Irrigation System: There Is More Than Meets the Eye
♦ New Irrigation System Offers Significant Water Savings ♦ Proper Pump Maintenance and Testing
♦ Making Your Case for An Irrigation Renovation
♦ USGA Water Use and Irrigation Literature
Bermudagrass Upgrade
Observations and Recommendations

1. Hodgepodge of Grasses
The primary playing areas in green surrounds, fairways and tees consist of a hodgepodge of grasses including common bermudagrass, cool-season and warm-season weeds, and patches of hybrid bermudagrass. The current combination of grasses and weeds does not provide the ability to deliver good conditions any time of the year. While golfers may consider the conditions acceptable, there is a huge opportunity at this facility if the irrigation system is upgraded to convert to hybrid bermudagrass and deliver a far superior playing experience, and one that will use much less water.

2. Convert To Hybrid Bermudagrass
While many courses are sodding hybrid bermudagrass at a cost of about $.70 per square foot, there is an option to sprig bermudagrass at a cost of about $.15 per square foot. However, this would require closing nine holes for a period of about 90 days during the summer months to complete the conversion. It is important to note that it is not recommended to consider any conversion until the irrigation system is upgraded. The success of the conversion relies on improved irrigation coverage. The current system limitations would significantly limit the success of the conversion. Here is an article that explains bermudagrass conversion in greater detail. 7 Weed Control
Observations

1. Significant Weed Population
Unfortunately, the golf course is littered with both cool-season and warm-season weeds. Green surrounds, fairways and tees have a very high weed population which significantly detracts from the golfer experience. It also weakens the existing turfgrasses.

Recommendations

1. Increased Weed Control Program
While it may be several years until the City has the funds to upgrade the irrigation system and convert to hybrid bermudagrass, weed control efforts should be increased immediately. There is a big opportunity to significantly reduce the weed population during the summer months, which will ultimately increase the health of the common bermudagrass. Please consider the following weed control program:
• Increased nitrogen. First and foremost, nitrogen should be increased on fairways to improve common bermudagrass density and coverage. It is always impressive to see that when bermudagrass density improves, the weed population decreases. Ideally, you would apply at least 2 pounds of nitrogen per 1,000 square feet between mid-September in late October and apply another 2 pounds of nitrogen per 1,000 square feet from early April through the end of May. Nitrogen should be applied only where necessary during the summer months.
• Spring preemergent weed control. Please consider the following two options for preemergence weed control, which should begin in late February or early March:
♦ One option is to spray indaziflam (Specticle®) on green surrounds, fairways and tees.

The Specticle will kill a majority of existing cool-season weeds. Specticle can be expected to provide weed control through the end of August. It is critical to avoid spraying Specticle within a 15-foot barrier of the putting greens. In this zone, it is recommended to use a combination of prodiamine and Pennant Magnum® for preemergence control. A second application will be needed in late May, and the chemistry should be switch to granular Ronstar® to pick up goosegrass control. ♦ The next option is to combine prodiamine with the Pennant Magnum in early March on green surrounds, fairways and tees. A second application will be needed with an alternative chemistry such as oxadiazon (granular Ronstar). Another option is simazine (Princep®).
• Fall postemergence goosegrass control. For postemergence control of goosegrass, it is strongly recommended to have Sencor® on hand. While the two-application strategy in the spring is very important to control the summer weeds, we discussed not using preemergence products in the fall given the common bermudagrass is susceptible to wet and soggy conditions. In fact, the annual bluegrass and ryegrass that recovers each fall effectively improves playing conditions during the winter months, especially in a wet winter, even without overseeding. It is worth noting that if you should ultimately convert the fairways to hybrid bermudagrass, then it would be important to control the winter weeds. 8 • Additional applications. There is also a fair amount of purple nutsedge on the golf course.

For this weed, it is important to use Celero® with two to three applications from mid-July through mid-October. You also may consider purchasing Vexis®, a granular product that can be used to spot apply to the nutsedge areas. The preemergent program provided above will help to control dallisgrass as well. However, when dallisgrass breaks through, it is recommended to spray Monument® as a postemergence control product.

Putting Greens
Observations

1. General Condition
I was able to view multiple greens during our visit, and I'm happy to report that all greens have a healthy combination of bentgrass and Poa annua.

2. Rooting Depth
Closer observation reveals roots extending to 5 to 6 inches in the greens.

3. Shear Strength
I utilized a shear strength tester to measure surface strength of greens. A value less than about 12 Newton meters (Nm) indicates weak surface strength. At Madera Municipal Golf Course, values ranged from 15 to 17 Nm, which is excellent this time of year, especially given the recent heat.

4. Excess Organic Matter
The putting greens are very soft and puffy, and ball marks are quite deep. A soil profile collected from greens reveals there is excess organic matter near the surface of the greens and there has not been enough sand applied for dilution.

Recommendations

1. Aeration and Vertical Mowing
It is recommended to continue with your program to conduct 5/8-inch-diameter core aeration on a 2- by 2-inch spacing this fall. It is recommended to immediately precede this operation with vertical mowing with blades set about 0.150 inches below the bottom of the rollers. Run the vertical mower up and back on the same pass and change directions, thereby making four passes over the greens. Follow by applying ample sand to dilute surface organic matter.

2. Increased Sand Topdressing
During the growing season, it is recommended to apply sand from February or March through October or November at a frequency of two or three times per month. Rates should range from as low as 40 to 50 pounds per 1,000 square feet to as high as 100 to 115 pounds per 1,000 square feet. During the primary growing season, conduct vertical mowing two to four times per month at light intensity. All these practices combined will help to reduce surface thatch and increase firmness. These practices will also help to smooth ball roll. 9 Bunkers
Observations

1. Exposed Sumps
The bunkers have an exposed sump in the lowest area of each bunker to facilitate drainage during rainfall events. While this may be effective to remove water, it is unsightly and negatively impacts play. Golfers must move their golf ball aside when the ball comes to rest in these lowlying areas. I will say this is extremely uncommon to see at golf courses.

2. Ample Sand
I was able to measure sand depth in a few greenside bunkers. It was great to see adequate sand at a depth of 6 to 7 inches. It was also good to hear that golfer comments concerning the bunkers are generally positive.

Recommendations

1. Continued Sand Addition
For the time being, it is recommended to continue to add sand where necessary in greenside bunkers. A good goal is to provide 7 to 9 inches of sand on the bunker floors. This will help with playability and drainage.

2. Bunker Renovation
A bunker renovation is needed at Madera Municipal Golf Course. However, I would strongly recommend focusing your capital monies on irrigation upgrades and converting to hybrid bermudagrass before any work may be considered on the bunkers.

Closing Comments
Thank you for an enjoyable morning spent on the golf course at Madera Municipal. Given that this was my first opportunity to see the property, it was impressive to see the amount of turf reduction and to see the greens in good condition. The major take-home message from this first initial visit is that it is strongly recommended to focus capital improvement funds on irrigation system upgrades and consider upgrading to hybrid bermudagrass. In the short term, it is necessary to increase funds for fertilizing primary playing areas and increasing weed control efforts. Thank you for your support of the USGA Green Section. Please do not hesitate to contact my office should you have any further questions or concerns.

Respectfully submitted,
Brian Whitlark, Regional Director
USGA Green Section, West Region
Distribution:

Dan Bacci, Sierra Golf Management
Jon Christensen, Sierra Golf Management
10 USGA Green Section
Turfgrass and Environmental Research
The USGA Green Section appreciates your support of the Course Consulting Service. First started in 1953, the Course Consulting Service provides unbiased assessments of golf facilities to optimize resources and reduce consumption of critical resources. The proceeds from the Course Consulting Service directly support the USGA’s annual $2 million investment in turfgrass and environmental research, which provides an estimated $2 billion annual benefit to the U.S. golf industry. Follow the QR Code for more information.

Tools and Solutions
The USGA Green Section is proud to offer tools and solutions for golf courses. Innovative products including Deacon, GS3, and GPS Services provide solutions to optimize the golf experience through data-driven communication and resource management.

Green Section Record
The USGA Green Section Record, is a free digital magazine offering the latest information on turfgrass management, environmental sustainability, innovation in golf course maintenance, and turfgrass research. If you would like to stay updated on regional topics, best management practices, and industry trends, please subscribe for free to The Record.

2. Madera County Grand Jury Report 2223-02
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1 City of Madera
Fails to Enforce the Golf Course
Contract Requirements
2022-2023
Madera County Grand Jury
Final Report 2223-02
Published on June 16, 2023
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2 Summary
The City of Madera (City) owns the Madera Municipal Golf Course located at 23200 Avenue 17, Madera, CA. It is adjacent to the west side of Madera Airport. The City does not operate this business. The Golf Course includes the building which houses a pro-shop for golfing attire and accessories, a banquet room, kitchen and bar, including onsite food and beverage concessions, and patio area. In 2009 the golf course management and operation were turned over to Sierra Golf Management, Inc. (Sierra) under a Lease Agreement (Lease) with the City. Recently, Sierra made an agreement with Sugar Pine Smokehouse, LLC (Sugar Pine) to operate the golf course food and beverage concessions. Sugar Pine presently operates the food and bar services. The City does not have a copy of the Sierra – Sugar Pine agreement, although the Alcohol Beverage Control (ABC) requires the City to approve the agreement before it can issue a Liquor License.

As of March 2023, the City is aware that Sugar Pine has a temporary ABC permit to serve liquor and Sugar Pine is operating the kitchen and bar concessions. The City has not produced any documentation on the Sierra – Sugar Pine agreement after the Madera County Grand Jury (MCGJ) request.

This report explores the City golf course, budgeting, revenue, and its operation by Sierra.

The City has not enforced the Lease requirements for Sierra’s signage and catering violations.

The City budget and financial reports are misleading and failed to include $64,000 rent City pays to the Airport. The City Budget shows a Net Surplus for the golf course which is actually only 10 percent of the amount shown. The City has often deviated from Sierra’s contractual payment requirements, by making revenue concessions to Sierra. The City has been timid in negotiations, lax in oversight, and has not enforced the Lease terms.

The City’s 14-year history of golf course agreements with Sierra, unless renewed by the City terminates on June 30, 2023.

Abbreviations
ABC - California Alcohol Beverage Control
City – City of Madera
Lease - All references to the 2009 Madera Municipal Golf Course Agreement and amendments.

MCGJ - Madera County Grand Jury
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3 Sierra – Sierra Golf Management, doing business as Sierra Golf Management, Inc.

Sugar Pine – Sugar Pine Smokehouse, LLC
USGA - United States Golf Association
Background
In 1991 the City of Madera established the Madera Municipal Golf Course in an Open Space Zone located at 23200 Avenue 17. In 2009, the City executed the original Lease with Sierra. The Lease includes the use, management, and operation of the 18-hole golf course, pro golf shop, driving range, putting green, golf carts, banquet room, parking lot, kitchen and beverage concessions, and events. The Lease period ended April 30, 2023, however it provided for two 30-day extensions. The City Manager signed the two 30-day extensions with Sierra, which are in effect until June 30, 2023.

Sierra is required to pay for annual Capital Improvements to the golf course. Sierra combined the 2021-22 Capital Improvement payments into the first extension year. Sierra spent $40,000 total to replace drains and sand in 11 bunkers for Capital Improvements. Sierra was to invest $15,000 to hook up a pipeline to the Madera Irrigation District, which as of March, the City states had not been done.

The Lease requires for Sierra to pay the United States Golf Association (USGA), a golf course advisory service, to provide reports annually on golf course Americans with Disabilities Act (ADA) compliance and guidance on golf course improvements. After a request to the City no USGA reports were provided to the MCGJ by the City. Sierra is required to keep records and reports for five years (see Lease Section 36). If these reports do not exist, and/or Sierra failed to pay the USGA for annual reviews, then Sierra has materially breached the Lease contract.

Lease Section 7.13 states, “Sierra shall be authorized to sell food and beverages …, or to subcontract for such services . . .” Section 23 allows Sierra to sublet the food and beverage concessions. Sugar Pine claims to have a ten-year lease with the City for the kitchen and bar concessions. The City denied the existence of any additional golf course agreements except the one with Sierra. The City as a prudent landlord should demand a copy of the Sierra – Sugar Pine agreement to evaluate insurance coverage, credit, and the City’s liability exposure.

The ABC Fresno Office has a file open to the public on Sugar Pine’s application for a 1 2
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4 temporary Permit allowing Sugar Pine to serve liquor at the golf course. The ABC cannot issue Sugar Pine a liquor License because no agreement between Sierra and Sugar Pine, and signed by the City, has been submitted to the ABC. The City as the property owner, is required to approve the Sierra – Sugar Pine agreement before the ABC can grant Sugar Pine a liquor license. Thus, the Sierra-Sugar Pine agreement, if and when it is produced to the ABC, will be available to the City and the public. The Sierra - Sugar Pine agreement may be void unless Sierra is able to keep and extend some agreement with the City.

The City did not provide an answer to the MCGJ about whether or not a Public Notice of the expiring golf course contract with Sierra must be put out for public bids.

Methodology
Interviewed key City personnel.

Examined City Lease with Sierra and six amendments.

Studied City budget noting identified loans, debt service, omitted Airport Lease payment, and revenue.

Inspected three years of monthly reports that Sierra filed with the City.

Reviewed equipment list (Exhibit B from original contract).

Followed payment record of Sierra.

Reviewed capital improvement costs for 2021.

Reviewed the City, Sierra, Sugar Pine, North Fork Indian Casino, ABC, and other websites.

Checked Secretary of State’s Business records on Sierra (none exist) and Sugar Pine Smokehouse, LLC.

Reviewed the North Fork Rancheria’s Environmental Impact Review (EIR) for planned casino construction off CA-99.

Contacted and reviewed and the ABC history of the liquor license ownership and present incomplete ABC file on Sierra’s license transfer to Sugar Pine.

Reviewed Sierra ownership and golf courses managed by Sierra.

Visited the premises and observed signage, ABC posting the change of liquor license to Sugar Pine, offsite catering information, menus and pricing, signage, banquet room, dining room, and bar areas.
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5 Reviewed the City water and sewer infrastructure system.

Reviewed the City zoning maps to note designation requirements and property development plans.

Reviewed the USGA website and the services it offers to golfers and golf courses.

Discussion
The MCGJ discovered that many Lease Sections, some of which are presented below are without clear definitions, are inconsistent, lack required updates, and carry forward irrelevant matters over the years. There has been a lack of City oversight and enforcement of Sierra’s contractual requirements. A major portion of the golf course revenue is excluded from the City’s participation. The City’s Budget financial information is misleading. The Net Surplus shown in the Budget is $361,236 when it is only $32,392. The inflated City Budget Report is misleading because it failed to subtract the debt service from the Net Surplus.

On March 17, 2021, the City and Sierra signed the sixth contract amendment to the 2009 Lease Agreement. This contract included all of the prior amendments, Exhibits; and carried with it many irrelevant, contradictory, confusing, and outdated terms. This creates problems for the City decision makers on what the golf course requires for upgrades, and its true financial picture.

During the pandemic, the City made generous financial concessions to Sierra by lowering Sierra’s annual Capital Improvement payments from $50,000 to $20,000 per year. The City reduced Sierra’s annual rent payments from $40,000 to $19,992 per year. These concessions add up to $100,000. However, Sierra’s monthly income reports to the City during that time showed no significant reductions to its income.

Sierra pays City $1.75 for each person playing a round of golf. Sierra’s monthly reports to the City exclude hundreds of rounds of golf in the sales column with $0.00. It is not clear from the monthly reports if all rounds of golf played are paid to the City. The contract definitions are not clear about this.

The City should negotiate for a percentage of excluded income defined in Lease section

4.4 to receive a more equitable share of revenue from Sierra. Reporting the rounds of golf played should not exclude any round or revenue from the City. The City has neglected to exercise reasonable oversight over this valuable public asset.
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6 I. Grossly Misleading City Budget Reports.

According to the 2022-2023 Madera Municipal Golf Course Fiscal Budget there is a $361,236 Golf Operations Net Surplus. This surplus does not include and subtract the golf course annual Debt Service of $328,844. The debt service is paid from the City’s Special Payments account. Line Item 8000 lists $12,744 for Interest Payments, and Line Item 8001 lists $316,100 for Principal Payments. These line-item expenses were not included in the golf course Operations Expense Budget. Deducting this $328,844 debt service from the stated $361,236 Net Surplus total there is only an actual $32,392 Net Surplus. The City admitted that because the Net Surplus is only 10 percent of the Net Surplus stated in the Budget, this could be misleading.

Since the figure is misleading, the City Council, Mayor, City Manager and the public cannot have an accurate financial picture about the golf course operation.

The City golf course makes an annual lease payment to the City Airport. This rent payment is approximately $64,000. This payment was omitted from the City Budget. It is not clear why the golf course charges $40,000 rent and pays the City Airport about $64,000 rent for a 15-acre water storage area. The City explained that the rent differential is an accounting practice adjusting payments between different City projects.

The monthly revenue generated by the golf course is stated in monthly reports that Sierra generates and provides to the City. The Lease requires Sierra to provide the City with monthly reports totaling the income Sierra received that month and the number of golfers using the course. The practice of totaling the revenue and rounds of golf played stopped in March of 2020. Sierra’s reporting change made it difficult for City to see how much money was owed by Sierra, because the City would have to add up all the figures in each column. The MCGJ totaled Sierra’s monthly reports in 2020 – 2022 which showed that during the Covid-19 pandemic, the golf course showed no slowdown in golf course income.

II. The 2009 Lease incorporated Exhibits A and B which are Obsolete.

The Lease, due to years of amendments and extensions without creating a new contract, includes many outdated inconsistent items. For example, Exhibit A has a revenue chart showing a 10-year revenue projection ending in the year 2019. That became obsolete in 2019. Exhibit B is 1 2
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7 the inventory of equipment owned by the City in 2009. The City sold all of this equipment and the pro-shop inventory to Sierra on November 18, 2009, making Exhibit B obsolete.

III. Record Keeping for Capital Improvements. The Lease requires Sierra to keep records for five years of its costs for annual Capital Improvements and Maintenance. Specifically, this requires keeping Capital Improvement and Maintenance plans, design plans, diagrams, work orders, materials, receipts, and proof of Sierra’s payments.

The City produced only one Capital Improvement record for the year 2021. The list shows the purchase of sand for about $7,000, and other items, however there were no plans, details, or evidence of City oversight. That record was a list of materials with corresponding costs. Lease Section 16.4 states that sand is a maintenance expense for Sierra, not a Capitol Improvement expense. However, in 2021, sand was paid as a Capital Improvement instead of a Maintenance expense. Maintenance items should not be credited for Sierra’s annual Capital Improvement costs.

The ultimate guidance for golf course annual planning is the U.S. Golf Association’s Annual Turf Advisory Service (USGA). Lease Section 7.2 states: “Sierra at its sole expense shall coordinate the annual USGA turf service. The annual turf advisory service shall serve as a baseline for course conditions and will provide Sierra and the City another tool for determining and prioritizing capital improvements and maintenance delivery plans.” This service offers the City and Sierra, the USGA’s independent golf course review and advice for improvements. This advice covers grading the slopes for handicapped persons’ access. The USGA offers many other detailed suggestions for capital improvement and maintenance goals to upgrade the golf course each year. Sierra has a mandatory duty to pay for these reports as part of planning. City was not able to provide any of these mandatory annual USGA reports.

IV. The City Oversight Director for the Golf Course.

The City Parks and Community Services Director is assigned to coordinate with Sierra to oversee the golf course, its events, condition, and upkeep. This oversight involves reviewing plans, approving designs, overseeing projects, construction, purchase orders, reports, implementing the USGA baseline improvement goals, and other “details” which are spelled out under annual Capital Improvements and other sections of the Lease. This oversight involves 1 2
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8 construction. As of December 2022, there had been no communication between Sierra and the Parks and Community Services Director who was appointed during the summer of 2022.

Lease Section 8.3 states, “The Director of Administrative Services shall act as City representative with respect to the work to be performed under this Lease Agreement. Such person shall have the complete authority to transmit instructions, receive information, interpret, and define City’s policies and decisions with respect to materials, equipment elements, and systems pertinent to Sierra’s services.” This Director does not exist in City job descriptions.

V. The City Has Failed to Enforce the Contract - Use of Name Violation by Sierra.

Both the Sierra and Sugar Pine websites omit the required City logos and the word “Municipal” from the name. The Lease states, “Sierra shall ensure that all brochures, scorecards, and other printed advertising and marketing materials always bear and maintain the City’s identity with the mandatory use by Sierra of the name ‘Madera Municipal Golf Course’ with the accompanying logos of the City and the City Parks and Community Services department as provided by the City.” The City has not enforced this requirement.

VI. The City Failed to Enforce the Catering Violation – Sierra and Sugar Pine offer Catering.

Sugar Pine has assumed the golf course liquor and food operations from Sierra. Sierra and Sugar Pine websites offer offsite catering services under the heading of FOOD. Sugar Pine offers offsite catering with menus for parties of 10, and individual meals paid for separately. This is in direct conflict with the catering prohibitions in Lease Section 7.13. This section continues, “Sierra agrees to limit its services under this agreement to the facilities at the golf course and will not under the auspices of this agreement provide catering services off of the golf course facility.” Use of the golf course kitchen for offsite food sales violates the catering prohibitions of the Lease. The last paragraph in Section 7.3 states: “Sierra shall have the exclusive rights, license, duty, and privilege to utilize the food and beverage concessions facilities within the restaurant and banquet building and patio at the Golf Course.” Kitchen use for offsite food and beverage delivery and sales is expressly prohibited. The City has not enforced this prohibition.

The ABC issued Sugar Pine a temporary permit to serve liquor from the bar. The ABC cannot issue a liquor license until the City signs off on the Sierra-Sugar Pine agreement. In 1 2
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9 March 2023, the City confirmed Sugar Pine has a temporary permit to serve liquor, and that there is no agreement between the City and Sugar Pine. The City states the only golf course agreement it has is the one with Sierra. Sugar Pine only has a “temporary permit” to serve alcohol because it has failed to submit its agreement with Sierra to the ABC. According to the ABC, the City as the property owner would have to approve any Sierra - Sugar Pine agreement making Sugar Pine the liquor operator before the ABC can change the temporary permit into a license. The City has never requested the Sierra – Sugar Pine agreement.

VII. Reporting Revenue Generated by the Golf Course – The City is Omitted from Most Revenue.

Lease Section 4.4 Permitted Uses - The “permitted uses” is a list of services and activities Sierra offers at the facility. “All revenue generated by Sierra shall be the property of Sierra including one hundred percent of all gross receipts from the sale of green fees, green fees packages, golf equipment, soft goods, supplies, lessons, driving range, cart fees, and food, beverage and banquet operations.”
Sierra advertises various golf – green fee packages ranging from weekly to annually.

These require payment to Sierra of upfront fees, and other monthly/annual fees. These programs require annual payments which range from $1,919 to $4800. Golfing activities and accessories such as golf carts, training, lessons, booking for tournaments, etc., are available.

None of the income from any of these specific activities is shared with the City.

VIII. Confusing Lease Definitions for Sierra Income and Rounds of Golf Played.

Lease Section 5.3. Per Round Rate. States, “per round rate shall be applied to all golf course rounds played in which Sierra received revenue or compensation from golfers.” Reviewing Lease Section 4.4 herein above, green fee packages are 100 percent Sierra income and are not shared with the City. Revenue from membership, green fee packages, or member players are not identified in Sierra’s monthly reports as revenue it received in that month. (See Lease Section 5.4.)
It is unclear if the City has or has not received revenue for each round of golf played where a “green fee package” or membership was sold instead of a day-player, day-payer. This is because the Sierra monthly reports show -0- under “sales” for member rounds of golf. The “sale 1 2
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10 of green fees, green fee packages” are 100 percent excluded from City payments. Each monthly report provided by Sierra to City shows -0- sales in the member column for rounds of golf played by members in that month.

Reporting by Sierra is an honor system based on mutual trust. The City has never done an audit of the Golf Course financial reports. According to City personnel, if an audit was ever conducted, it was an analytical audit. An analytical audit is the historical comparisons of the monthly reports for different years. These audits do not verify the facts and figures listed in prior or current monthly/yearly reports, only the historical trends compared.

Findings:

F 1 The MCGJ finds that the City’s golf course Budget reports are misleading. This gives the City Council and the public a false understanding of the actual Net Surplus in the City Budget.

F 2 The MCGJ finds that Lease Exhibit A and Exhibit B are obsolete.

F 3 The MCGJ finds that the record-keeping requirements of the Lease are not being met.

F 4 The MCGJ finds that the City appointed the Parks Director to coordinate with Sierra for this golf course planning and oversight role.

F 5 The MCGJ finds that the City has failed to exercise reasonable oversight and enforcement over the golf course maintenance and capital improvements.

F 6 The MCGJ finds that the Lease requires that logos and name “Madera Municipal Golf Course” must always be used for all signage, announcements, menus, events, websites, etc. The MCGJ finds that the logos and word “Municipal” have been often omitted from required usage.

F 7 The MCGJ finds that use of the golf course kitchen for catering from the golf course, is offered on both Sierra and Sugar Pine websites. Catering from the golf course is Prohibited and is a breach of the Lease.

F 8 The MCGJ finds that in 2021-23 the City gave Sierra unnecessary financial concessions due to the Covid-19 pandemic.

F 9 The MCGJ finds that Lease section 4.4 unnecessarily excludes the City from receiving any revenue from the described activities.

F 10 The MCGJ finds that there are no United States Golf Association reports as required by the Lease.
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11 Recommendations
R 1 The MCGJ recommends that the City Finance Director correct and clarify all budget entries by December 31, 2023.

R 2 The MCGJ recommends that the City of Madera immediately rewrite a new contract for the lease, management, and operation of the Madera Municipal Golf Course.

R 3 The MCGJ recommends “Detailed” records of Capital Improvements and Maintenance expenditures and the USGA advice reports, be kept by the City for public viewing and for at least five years or as required by law.

R 4 The MCGJ recommends that Parks Director or other City Representative immediately begin to monitor and exercise oversight over the golf course Capital Improvement and Maintenance expenditures.

R 5 The MCGJ recommends that the City immediately specify the Maintenance and Capital Improvement categories as defined by USGA to eliminate confusion as to what Sierra is paying and/or has paid for golf course Capital Improvements and Maintenance.

R 6 The MCGJ recommends that the City immediately enforce the Lease provisions requiring the word ‘Municipal’ and all other name and logo requirements.

R 7 The MCGJ recommends that the City immediately review its position on catering. When making any decision, the City should determine its original purpose for prohibiting offsite food service and catering. City should enforce the agreement or allow the use.

R 8 The MCGJ recommends that the City immediately negotiate for concessions it made during Covid-19. The City should consider increasing its share of revenue by participating in all of Sierra’s income excluded from the City in Lease Section 4.4.

R 9 The MCGJ recommends that a new Lease be drafted immediately deleting all obsolete terms which unnecessarily exclude the City from City revenue.

R 10 The MCGJ recommends that the City should immediately make the USGA mandatory annual reports available for public review.

Required Responses Pursuant to Penal Code sections 933 and 933.05, the Madera County Grand Jury requests responses as follows:

From the following elected county officials within 60 days:
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12 Mayor of Madera
Madera City Hall
205 West 4th Street
Madera, CA 93637
Madera City Council
Madera City Hall
205 West 4th Street
Madera, CA 93637
Invited Responses Pursuant to Penal Code sections 933 and 933.05, the grand jury requests responses as follows:

From the following governing bodies within 90 days:

City Manager
Madera City Hall
205 West 4th Street
Madera, CA 93637
Director of Parks and Community Services
John W. Wells Youth Center
701 East 5th Street
Madera, CA 93638
Reports issued by the Grand Jury do not identify individuals interviewed. Penal Code section 929 requires that reports of the Grand Jury not contain the name of any person or facts leading to the identity of any person who provides information to the Grand Jury.

4. Report to the City Council from August 16, 2023, Response to Madera County Grand Jury Final Report 2223-02: “City of Madera Fails to Enforce the Golf Course Contract Requirements”

REPORT TO CITY COUNCIL
Approved by: Council Meeting of: August 16, 2023
_________________________________ Agenda Number: ___________ Arnoldo Rodriguez, City Manager
SUBJECT:

Response to Madera County Grand Jury Final Report 2223-02: “City of Madera Fails to Enforce the Golf Course Contract Requirements”
RECOMMENDATION:

It is recommended the City Council (Council) review the proposed Response to the Grand Jury Report (Report) and approve the Response as presented or provide direction on changes to the proposed Response
SUMMARY:

The Madera County Grand Jury (MCGJ) issued a report on June 20, 2023. The Council has 90 days to submit a written response. Written responses must be prepared and submitted within specified guidelines provided by the California Penal Code.

DISCUSSION:

The MCGJ issued a Report titled “City of Madera Fails to Enforce the Golf Course Contract Requirements” on June 20, 2023 requiring a response from the Mayor and from City Council. The Mayor and Council has 90 days to submit a written response to the Report and submit it to the Madera County Superior Court Presiding Judge. Staff has prepared a proposed Response to the Report for Council's consideration, consistent with Penal Code requirements to fulfill the required response from the Mayor and from Council.

Note that Penal Code Section 933.05 includes a specific manner for responding to the Findings and the Recommendations provided in the MCGJ Report. That process is outlined below.

A. Response to Findings.

In response to each grand jury finding in a final report, the responding party is statutorily required to indicate one of the following:

1. The respondent agrees with the finding.

2. The respondent disagrees wholly or partially with the finding; in which case the response shall specify the portion of the finding that is disputed and shall include an explanation of the reasons therefor.

B. Response to Recommendations.

In response to each grand jury recommendation in a final report, the responding party is statutorily required to indicate one of the following:

1. The recommendation has been implemented; in which case the responding party must include a summary of the implemented action;

2. The recommendation has not yet been implemented, but the recommendation will be implemented in the future, in which case the responding party must include a timeframe for implementation;

3. The recommendation requires further analysis, in which case the responding party must include an explanation, the scope and parameters of an analysis or study, and a timeframe, not to exceed six months from the date of the final report's publication, for the matter to be prepared for discussion by the applicable agency or department officer, head, or governing body being investigated or reviewed; or

4. The recommendation will not be implemented because it is unwarranted or unreasonable, in which case the responding party must include an explanation therefor.

FINANCIAL IMPACT:

The City's proposed Response to the Madera County Grand Jury does not constitute a direct financial impact to the City.

ALTERNATIVES:

The Council has the following options to consider relating to this matter:
▪ Approve the Response to the Grand Jury as presented.
▪ Approve the Response with amendments.
▪ Direct staff to return with additional information at a Council meeting before September 18, 2023, when response is required by the MCGJ, meeting the 90-day response requirement.

ATTACHMENTS:

1. City of Madera Response to Madera County Grand Jury Final Report 2223-02: " City of Madera Fails to Enforce the Golf Course Contract Requirements”

2. Madera County Grand Jury Report 2223-02

1. City of Madera Response to Madera County Grand Jury Final Report 2223- 02: " City of Madera Fails to Enforce the Golf Course Contract Requirements”
____________, 2023
The Honorable Michael Jurkovich, Supervising Judge
Madera County Superior Court
Supervising Judge for Grand Jury
200 S. G Street
Madera, CA 93637
Re: City of Madera Fails to Enforce the Golf Course Contract Requirements 2022-2023 Madera County Grand Jury Final Report 2223-02; Published on June 16, 2023 Dear Honorable Judge Jurkovich:

This letter is submitted on behalf of the Mayor and City Council of the City of Madera, the City Manager, and the Parks & Community Services Department, collectively referred to as “City” in this Response.

On Tuesday, June 20, 2023, the City of Madera (“City”) received an email from the Madera County Grand Jury, which attached a copy of the Grand Jury’s Report titled “City of Madera Fails to Enforce the Golf Course Contract Requirements” (hereafter “Report”). The report does not stipulate when it would be released to the public. As such, we view the release date as June 20, 2023.

Penal Code Section 933 (c) requires that the governing board of the public agency (here, the City Council) is required to respond not later than 90 days after the public release date. As required, the City respectfully submits the following responses to the Findings and Recommendations in the Report in the form required by the Penal Code.

Please be advised the City has taken the Grand Jury’s Report seriously and has endeavored to address the Report comprehensively, as evidenced by this Response and by the attachments comprising 20 pages.

Great care has been taken to ensure the City responds concisely yet with appropriate details as demonstrated by references to numerous documents which the City has researched, reviewed, and attached to this Response.

Based on the above, the following constitutes the City’s Response to the Grand Jury’s Findings and Recommendations relating to the Report.

FINDINGS
F1: The MCGJ finds that the City’s golf course Budget reports are misleading. This gives the City Council and the public a false understanding of the actual Net Surplus in the City Budget.

Response 1: The City disagrees partially with this finding. As written, it is unclear what the finding is in reference to. The City’s adopted Fiscal Year 2022/23 Operating Budget clearly identifies the City’s debt pertaining to the Golf Course on pages 182, 187, and 244 under the title “Golf Couse Debt Service.”
The City acknowledges that potential confusion may be introduced on Page 245 of the adopted Fiscal Year 2022/23 Operating Budget document where it indicates that the City will “Transfer In” $298,804, allowing the City to service its debt. A transfer is required to service outstanding debt considering the revenue generated is less than debt, and this practice is common in government accounting practices. This means that the City transfers that amount from the General fund to ensure the debt payments are made.

While this terminology is used in public finance, greater explanation may be warranted on how these standards apply to the City budget.

With that said, the City routinely highlights the outstanding golf course loan balance. For example, in the report to the City Council on March 17, 2021, pertaining to the Sixth Amendment, it states:
“It is worth noting that there is outstanding debt for the golf course. The annual debt service for the golf course loan is approximately $328k in calendar years 2021, 2022, and 2023. The annual debt decreases to roughly $164k in 2024 at which time the debt will be retired. In addition, the golf course leases land from the Airport at an annual cost of $60k.”
Moreover, the City’s Fiscal Year 2022/23 Operating Budget, notes, in part:
“The [golf course] fund does not typically cover its operating expenses with annual revenues. Due to a lack of revenue, the General Fund supports the Golf Course Fund with annual transfers‐in” (Page 180)
The City is noting that it "disagrees partially" because of the mandated method for response.

F2: The MCGJ finds that Lease Exhibit A and Exhibit B are obsolete.

Response 2: The City agrees with this finding. Said exhibits were part of the original 2009 Agreement between the City and Sierra Golf Management, Inc. (SGM); however, because the exhibits remain part of the official record and for transparency, they have not been omitted from more recent updates. It is not a typical business practice to delete exhibits from existing agreements as this would create a void in the record.

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