Saturday, July 18, 2009

Ballard Adminstration Proposes Redoing City Golf Course Contracts; The History of Golf Course Privatization in Indianapolis

Today's Indianapolis Business Journal brings us a story that the City of Indianapolis is requesting proposals to manage 12 of the 13 golf courses owned by the City:

Call it the Muni Cup of golf management.

Mayor Greg Ballard’s administration is requesting proposals to manage all but one of Indianapolis’ 13 municipal courses. The move could displace at least some of the current operators while giving the cash-strapped city a financial boost.

To qualify, managers must agree to pay for capital improvements, which in recent years have been the city’s responsibility. In addition, the administration is encouraging those seeking to run courses that don’t need major upgrades to make upfront cash payments.

The potential shakeup comes at a tough time for the golf business, which suffers from a glut of private courses and a shortage of players.

But for potential course managers, the purse is enticing. The Indianapolis courses collectively have $5.3 million in annual revenue. The city will award 10-year contracts, and one company may win them all. At least one out-of-state operator says it will bid.

“It’s a big opportunity for somebody,” said Tom Cooprider, who has managed the Sahm course in Castleton the past 15 years.

Cooprider is one of a handful of local golf managers who’ve held contracts since former mayor Steve Goldsmith privatized the courses in 1993. The city has renegotiated and rebid individual contracts since then, but never offered them as one package. “We’re trying to get the best combination of much-needed capital improvements, and more money to pay for golf and the park system in general,”
said Michael Huber, Ballard’s director of enterprise development. The deadline for bids is Aug. 14.

Coincidentally, 11 of the contracts expire at the end of this year, and Winding River expires at the end of 2010. Huber said the city is taking advantage of the timing to make requirements and financial terms more consistent. But he insisted the new approach doesn’t mean Ballard is itching to hand the 12 courses to a single company.
To see rest of the article. click here.

This is a subject I know more than a little about. In 1993 and early 1994, I did considerable research on the city's privatization of golf courses. Then Mayor Goldsmith's administration treated the golf course privatization contracts as contracts for "personal services" and did not bid them out. There was a big dispute at the time whether the Goldsmith administration was violating state law by not bidding out the contracts. Although the IBJ article talks about a deadline for "bids," it appears that Ballard is following the Goldsmith model treating the contract(s) as not having to be bid out.

What makes a difference? When contracts are for personal services, it is much easier to shake down potential contractors. It happens all the time with the city's legal work. That work is routinely channelled to the city's big law firms which contribute the most to the winning mayoral candidate.

Indeed, then Mayor Goldsmith's financial reports at the time showed that every golf pro who won a contract to run a city golf course had made significant contributions to the Goldsmith campaign. Is there reason to expect anything less from the Ballard administration?


Unigov said...

City courses are badly mismanaged but I don't understand why - look at Pleasant Run - busiest course in the city but

a) No ranger and no time enforcement - can take over 5 hours to play

b) No grouping up - it's common to see twosome after twosome after twosome.

The city and the operator would make more money if they ran the courses right.

As for Ballard, he's as crooked as Goldsmith...remember the newfangled 'bench billboards' under Goldsmith - talk about pay to play. Ballard said a month ago he'd get rid of them but they're still around.

Gary R. Welsh said...

Paul, As I read the story, the City is conducting an RFP process, which the law requires. There are two types of privatization agreements: operating agreements and build, operate and transfer agreements. One of the issues Goldsmith ran into was whether purchases and construction work performed by the private operator were subject to public bid laws and prevailing wage requirements. The law requires public bidding on their purchases and prevailing wages if the private operator is using pubic funds to pay for the work. Goldsmith didn't conduct an an RFP when he did those original contracts. The law did not clearly require him to do so, and governments in Indiana had for many years treated these privatization agreements as not requiring any public bid process because they were deemed contracts for personal services. The law past in the aftermath of the Goldsmith controversy changed all that. Nonetheless, the City of Lawrence ignored that law with the help of Ice Miller and gave away the city's water company and millions of dollars in cash and assets to cronies of former Mayor Tom Schneider. That was a criminal act, and all of the parties skated on it when U.S. Attorney Susan Brooks ignored the FBI investigatory findings and moved on like nothing had happened. I was appalled by Ice Miller's actions. Their attorneys were right there every step of the way when that legislation changing the law went through the legislature. They knew the law was being violated and went ahead with the deal on behalf of the private operators, even though they had represented the City of Lawrence and claimed their role was limited to that of a "scrivener."

Paul K. Ogden said...

Thanks, Gary, I thought there had been a change in the law since the Goldsmith golf course privatization, but I wasn't sure. The RFP process though is not the same thing as bidding it out, is it?

Regardless, I'm pretty sure they will manage to ensure tha these contract(s) go to a big campaign contributor. Just a hunch.

Gary R. Welsh said...

True, Paul, but at least an RFP process creates a paper trail that allows the public to review the proposals submitted to the City to at least get a sense of whether its decision was economic-based or politically-based. I agree, though, it alawys seems that the contractor chosen knew before the RFP went out for publication that it would be awarded the contract.

Unknown said...

I looked for a follow up or any news on how this ended up working out and cannot find any results. Did the "bid" process end and who was awarded the new contracts?
Thanks for keeping eyes on the processes of the city.