Score: -1 (4/0/5)
Ventura County Grand Jury • 2004-2005

City of Oxnard River Ridge

14 pages
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Findings and Recommendations 36 findings

F01
The City constructed the River Ridge Golf Club, a hotel and a NFL football training facility on the site of the former Santa Clara Landfill in the northwestern edge of the City.
No recommendations for this finding
F02
There are typically two methods by which municipal golf courses are managed. One method is a turnkey operation where the contractor is paid a fee to run the golf course on behalf of a city, without a great deal of city oversight. The other is a city-run option where staff is hired and the city manages all operations with city employees.
No recommendations for this finding
F03
By 1993, the City had experienced several years of unsuccessful operations with a turnkey contractor. River Ridge was losing money and the facilities had begun to fall into disrepair. The City acted to develop a more effective and profitable method of managing River Ridge.
No recommendations for this finding
F04
Even though the City recognized the disadvantages of contracting out the management in a turnkey operation, they did not wish to take on the administrative burden of managing the day-to-day operation of a golf course.
No recommendations for this finding
F05
The City contracted with HTGG to manage the River Ridge operations based on a unique agreement crafted from the specific requirements of the City. Under their agreement, the City still exercises a measure of control and oversight over the contractor. The contractor shares in the profits of a well- run operation. The City refers to their arrangement as a public-private partnership.
No recommendations for this finding
F06
The City’s stated primary purpose in contracting with HTGG is to have a first class golf course and to maintain an excellent product at an excellent price. There are incentives for HTGG designed into the contract with the effect that, when the golf course is well-maintained and well-operated revenues are greater, thereby increasing profits.
No recommendations for this finding
F07
The City states that their arrangement with High Tide and Green Grass, Inc. fully meets the City’s objectives. The City receives tangible financial benefits City of Oxnard Golf Course Management 3 from the golf course and there are intangible benefits to the surrounding community. Funds and Terms of the Agreement
No recommendations for this finding
F08
The original contract between the City and HTGG was approved by the City Council and effective on December 1, 1993. Modifications to the agreement were approved as follows: The Second Agreement approved 12/15/98 The First Amendment to the Second Agreement approved 12/9/03 The “Different Agreement” approved 1/6/04 The Second Amendment to the Second Agreement approved 10/19/04 The most recent agreement of 10/19/04 is the subject of the remaining findings.
No recommendations for this finding
F09
Exhibit C-1 of the agreement provides for the City’s payment to HTGG of a minimum amount provided for in the Business Plan, plus a percentage of Base Revenue achieved in excess of the Minimum Base Revenue for each period, using a declining sliding scale of 50% to 25%. In fact, this is not done during each period but annually, and the payment is made from HTGG to the City instead of from the City to HTGG.
No recommendations for this finding
F10
Payments to HTGG are not made in accordance with the agreement. The agreement states that the City is making the payments to HTGG, when in fact HTGG reimburses itself from the funds still under its control.
Related Recommendations (2)
R01
Thoroughly review the written agreement to reconcile differences in policy (the contract) and practice with the ultimate objective of modifying the contract to match the practices in effect. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C- 15, C-17, C-18, C-19, C-22)
R02
The contract should reflect the nature of the relationship between the City and HTGG as a public-private partnership, specifically delineating the process by which the City has monthly oversight over HTGG revenue, income, and budget. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C-15, C-17, C-18, C-19, C-22)
F11
Financial Statements submitted to the City by High Tide are not prepared in accordance with the terms of the contract.
Related Recommendations (3)
R01
Thoroughly review the written agreement to reconcile differences in policy (the contract) and practice with the ultimate objective of modifying the contract to match the practices in effect. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C- 15, C-17, C-18, C-19, C-22)
R02
The contract should reflect the nature of the relationship between the City and HTGG as a public-private partnership, specifically delineating the process by which the City has monthly oversight over HTGG revenue, income, and budget. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C-15, C-17, C-18, C-19, C-22)
R03
The contract should reflect the addition of a revenue and expense audit of HTGG on behalf of the City. (C-10, C-11, C-20)
F12
Financial statements submitted to the City mayor may or may not be subject to an independent audit.
Related Recommendations (1)
R03
The contract should reflect the addition of a revenue and expense audit of HTGG on behalf of the City. (C-10, C-11, C-20)
F13
The City described to the Grand Jury a method of doing business that evolved over time as a practical refinement of the contract. The Grand Jury asked if there would be a different result if the City followed the exact terms of the contract. The City replied that it would not be good business to follow the contract as written and it would “probably be worse” if they did.
Related Recommendations (2)
R01
Thoroughly review the written agreement to reconcile differences in policy (the contract) and practice with the ultimate objective of modifying the contract to match the practices in effect. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C- 15, C-17, C-18, C-19, C-22)
R02
The contract should reflect the nature of the relationship between the City and HTGG as a public-private partnership, specifically delineating the process by which the City has monthly oversight over HTGG revenue, income, and budget. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C-15, C-17, C-18, C-19, C-22)
F14
Prior Grand Jury reports identify the golf course monies collected by HTGG to be City money. The City and HTGG reported to the Grand Jury that these funds are private, not city money. There is a “city interest in the money,” but the funds remain private until turned over to the City.
No recommendations for this finding
F15
The agreement also specifies that in any fiscal year, if the sum of the budgeted operating expenses and cost of goods sold identified in the Business Plan exceeds the Minimum Base Revenue, the Operator and the City, in determining the amounts to be paid to each other, shall subtract from the amount otherwise allocable under the agreement, a sum equal to 50% of the amount by which such budgeted operating expenses and cost of goods sold exceed Minimum Base Revenue for each year. City of Oxnard Golf Course Management
No recommendations for this finding
F16
In 1998 and 1999, HTGG revised the treatment of cost of goods sold by including it both in revenue and expenses and for the calculation of the City’s profit share and net cash. It is not clear if the City ever specifically approved this change or focused on the impact to the profit-sharing calculation, which may reduce the City’s share.
Related Recommendations (2)
R01
Thoroughly review the written agreement to reconcile differences in policy (the contract) and practice with the ultimate objective of modifying the contract to match the practices in effect. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C- 15, C-17, C-18, C-19, C-22)
R28
C-20. As to the sufficiency of the City’s portion of HTGG revenues, that is a matter for the City Council to determine. If the City Council has been provided complete and accurate information and determines that the amount received from golf course operations is satisfactory, it is not a matter for the Grand Jury to comment. However, if the City Council is making decisions on erroneous or incomplete information, or if the administrative controls are not adequate to ensure compliance with the terms of the agreement, those are more serious matters at the basis of the Grand Jury’s concerns. (F-05, F-06, F-07, F-09, F- 13 thru F-16) C-21. The City of Oxnard is satisfied with the amount of income derived from the golf course operation. (F-07, F-13, F-20, F-26) C-22. The City’s frustration with repeated explanations to the Grand Jury is based on a misconception of continuity of the Grand Jury. Unfortunately, as long as the City Council approves one agreement and the City staff executes another, there is the possibility that a newly impaneled Grand Jury or concerned citizens will be asking the same questions. (F-26 thru F-33) Recommendations R-01. Thoroughly review the written agreement to reconcile differences in policy (the contract) and practice with the ultimate objective of modifying the contract to match the practices in effect. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C- 15, C-17, C-18, C-19, C-22) R-02. The contract should reflect the nature of the relationship between the City and HTGG as a public-private partnership, specifically delineating the process by which the City has monthly oversight over HTGG revenue, income, and budget. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C-15, C-17, C-18, C-19, C-22) R-03. The contract should reflect the addition of a revenue and expense audit of HTGG on behalf of the City. (C-10, C-11, C-20) R-04. Supplement the existing Project Manager with contract oversight skills, either through intensive training or by adding additional personnel. (C-06, C-10, C-
F17
The City publishes the number of rounds of golf played and projected as well as the current fees per round of golf. The simple math of rounds multiplied by fees gives the impression that HTGG has more revenue than it reports.
Related Recommendations (1)
R01
Thoroughly review the written agreement to reconcile differences in policy (the contract) and practice with the ultimate objective of modifying the contract to match the practices in effect. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C- 15, C-17, C-18, C-19, C-22)
F18
The City offers many financial incentives to enable community residents to use the facilities. There are discounts for children, families, seniors and special groups. A significant number of rounds are played at discounted rates. Project Management
No recommendations for this finding
F19
The prior Grand Jury recommended that the City Manager assign a highly qualified and experienced contract administrator as Project Manager to oversee the administration of the River Ridge agreement and any successor agreement.
No recommendations for this finding
F20
The City responded to that Grand Jury that the current Project Manager is highly qualified in golf course management and they are satisfied with his performance.
No recommendations for this finding
F21
Prior Grand Jury reports refer to misstatements by the Project Manager as one source for the appearance of impropriety. The Project Manager has made the following statements to the current Grand Jury: On the subject of financial oversight, he stated, “I have no clue” on what it all means. On the subject of the contract, he stated, “Nobody can read and understand a contract,” and finally, “If we followed the contract as it is written on paper, we would probably be worse.”
Related Recommendations (1)
R04
Supplement the existing Project Manager with contract oversight skills, either through intensive training or by adding additional personnel. (C-06, C-10, C- 11) Responses City of Oxnard (R-01 thru R-04)) City of Oxnard Golf Course Management 9 Commendations The City of Oxnard has expended a great deal of time and effort to answer the inquiries of the Grand Jury. This inquiry has required extensive historical analysis and comparative study. Throughout this process, the City staff has remained courteous and responsive to all requests for meetings and information. They have patiently explained their operations and the reasons behind all activities. In addition, the efforts of the City in regard to River Ridge have resulted in substantial improvements to the community. This report is in no way critical of the work that has been done to create a beautiful amenity from a landfill. The City should be commended on its efforts on behalf of the public. Attachments 1. City of Oxnard, Director of Public Works, letter dated March 30, 2005 2. City of Oxnard, City Manager, letter dated January 23, 2004 10 City of Oxnard Golf Course Management Attachment 1 ( ) City of Oxnard Golf Course Management 11 Attachment 1 ( ) 12 City of Oxnard Golf Course Management Attachment 2 ( ) City of Oxnard Golf Course Management 13 Attachment 2 ( ) 14 City of Oxnard Golf Course Management
F22
There has been much made of the term “account created jointly” and its confusion with the term, “joint account.” The term "joint account" implies private access to public funds and a significant lack of control.
No recommendations for this finding
F23
The term "account created jointly" represents public access to private financial records. This provision is a significant addition to the overall control environment and oversight function on behalf of the City.
No recommendations for this finding
F24
As recently as this year, the Project Manager still used the term "joint account" to the Grand Jury to refer to the banking arrangement.
No recommendations for this finding
F25
The Project Manager pointed out to the Grand Jury the fact that the City has not been required to increase the budget over the past few years as evidence that they are not over-budgeting the golf course operation. Grand Jury Oversight
No recommendations for this finding
F26
The City, in a letter dated March 30, 2005, from the Director of Public Works, states, “the City’s agreement with High Tide conforms to State law.” He further states, “There is more than one legitimate approach to structuring an agreement for public golf course management and operation. Our approach City of Oxnard Golf Course Management 5 not only meets the City’s needs, but also the needs of our many satisfied River Ridge Golf Club patrons.”
No recommendations for this finding
F27
The Director of Public Works went on to state in his letter, “because government oversight is a critical Grand Jury function, the public has the right to expect that inquiries will be carried out in a responsible and even-handed manner. If this oversight is less than objective, the Grand Jury should recognize that public confidence in its ability to perform this critical role may diminish over time.”
No recommendations for this finding
F28
In meetings with the City, the Grand Jury learned more of their frustration that one or two citizens will complain repeatedly about the River Ridge operations, and they believe that the Grand Jury should not initiate an investigation on a small number of complaining citizens. In addition, the City expressed that meeting with the Grand Jury and explaining why events have to be the way they are and how the City benefits from the arrangement should be sufficient to resolve the issue once and for all.
No recommendations for this finding
F29
Each year on July 1, a new Grand Jury is impaneled. Although it may have a limited number of carry-over jurors from the prior year (jurors cannot serve more than two consecutive years), the body is new and cannot carry over conclusions from the prior year. Even if a prior Grand Jury investigated the same complaint, each new Grand Jury must conduct its own independent investigation.
No recommendations for this finding
F30
In accepting or rejecting a citizen complaint, the Grand Jury considers many factors. It looks at the facts presented in the complaint to determine if they are fairly represented. If there has been a previous Grand Jury report on the same topic, the Grand Jury will read that report and review the responses provided by the affected agencies. Additionally, the Grand Jury will review its priorities and determine if the inquiry can be conducted in the available time.
No recommendations for this finding
F31
In the case of River Ridge, the new complaints repeated the concerns of prior complaints to earlier Grand Juries. In addition, the responses from the City of Oxnard to those past reports did not indicate to the Grand Jury that those issues had been adequately resolved.
No recommendations for this finding
F32
Once a complaint is accepted for investigation, the Grand Jury is required to remain independent and objective. In carrying out an investigation or inquiry, each Grand Jury reviews all the available evidence and reaches its own conclusions. In the interest of a completely objective evaluation, the Grand Jury cannot adopt as its own the opinions of either the complainant or the agency without its own independent verification.
No recommendations for this finding
F33
Penal Code Section 939.9 states, A grand jury shall make no report, declaration, or recommendation on any matter except on the basis of its own investigation of the matter made by such grand jury. A grand jury shall not adopt as its own the recommendation of another grand jury unless the grand jury adopting such recommendation does so after its own investigation of the matter as to which the recommendation is made, as required by this section. City of Oxnard Golf Course Management
No recommendations for this finding
F34
As acknowledged by the City and HTGG, there are substantial differences in the contract as written and in the actual practice of the parties to the contract. Those differences might lead reasonable people to conclude there is something questionable about the arrangement.
Related Recommendations (2)
R01
Thoroughly review the written agreement to reconcile differences in policy (the contract) and practice with the ultimate objective of modifying the contract to match the practices in effect. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C- 15, C-17, C-18, C-19, C-22)
R02
The contract should reflect the nature of the relationship between the City and HTGG as a public-private partnership, specifically delineating the process by which the City has monthly oversight over HTGG revenue, income, and budget. (C-01, C-02, C-04 thru C-07, C-09, C-12 thru C-15, C-17, C-18, C-19, C-22)
F35
Overcoming the first impression of wrongdoing is a long exercise of document reviews and interviews with all parties to the contract. The Grand Jury has expended considerable time to unravel and understand the information presented by the City.
No recommendations for this finding
F36
There have been improvements in the River Ridge oversight over the past two years. The Project Manager has been provided a financial analyst and the City has included a full annual audit as part of their oversight function, increasing the flow of daily operational and in depth financial information. Conclusions C-01. The City does not enforce all the terms of the written contract between the City and HTGG. (F-09, F-10, F-11, F-13, F-21, F-34) C-02. After a great deal of document review and verbal explanations, the Grand Jury concluded that the City and the contractor appear to honor the spirit, if not the letter, of the agreement. (F-05, F-06, F-07, F-13, F-16, F-18, F-26) C-03. As long as the current personnel on both sides of this verbal arrangement remain of the same mind, this non-verbal agreement could remain productive indefinitely. The risk is, if they don’t. (F-05, F-06, F-07, F-09 thru F-16, F-21,
No recommendations for this finding

Additional Recommendations 1

These recommendations are not explicitly linked to specific findings.

Conclusions 1

Commendations 1

Agency Responses 2

Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.