3. Memorandum of Understanding - Kalispell Golf AssociationCity of Kalispell
Post Office Box 1997 - Kalispell, Montana 59903
Telephone: (406) 758-7701 Fax: (406) 758-7758
MEMORANDUM
To: Mayor Johnson and City Council
From: Doug Russell, City Manager
Re: KGA MOU/Lease Payment
Meeting Date: October 6, 2014
BACKGROUND: The City of Kalispell and the Kalispell Golf Association have been in
discussions related to the capital protection program identified in the lease between the two
parties (the lease is attached for review). As part of this discussion, the parties have been
considering a memorandum of understanding that would place the capital protection program
responsibilities under the KGA in lieu of allowing the KGA to keep its annual lease payment
(see attached Draft MOU).
Council previously approved a 90 day extension to allow KGA to review this possible
arrangement for an extended period of time while allowing their FY2014 lease payment to be
returned should they agree to the MOU.
The KGA has recently signed the MOU that would allow them to retain their annual lease
payment and to accept the responsibilities for the obligations that would otherwise be funded by
the City as identified in Section 6(b) of the Lease agreement, presented below:
b.)Representativesftom the KGA and the City's Parks Department and Department of
Public Works shall meet prior to December 31, 2009 to draft a capital protection
program for the property covered by this lease. Items of deferred maintenance shall be
identified as well as any other assets suffering or threatened with damage or devaluation.
Estimated costs, revenue sources and priorities will be developed as a part of a plan to
protect and preserve the assets. In the event that the KGA determines to expend its funds
for infrastructure improvements that are on the capital protection program prior to that
time scheduled and that are otherwise scheduled to be funded by the City of Kalispell, it
may apply for a credit of those funds against its lease payments.
FISCAL IMPACT: The annual lease payment that would be retained by the KGA would be
approximately $17,000 - $25,000 depending upon gross revenues. This funding would have
been earmarked toward projects at the golf course that the KGA is now responsible for, making
the overall financial impact neutral.
RECOMMENDATION: It is recommended the City Council move to approve the
Memorandum of Understanding between the Kalispell Golf Association and the City of
Kalispell, and to authorize the reimbursement of the Fiscal Year 2014 lease payment.
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Return to:
City Clerk
P.O. Box 1997
Kalispell, NIT 59903
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THISLEASE, made and entered into as of the 11� day of L,) , 2009, by and
between the City of Kalispell, Montana, a Municipal Corporation, hereinafter referred to as
LESSOR, and the Kalispell Golf Association, a Montana Corporation, hereinafter referred to as
LESSEE,
WITNESSETH:
For and in consideration of the mutual covenants and promises hereinafter set forth, the
parties hereto agree as follows:
1. PROPERTY: LESSOR hereby leases to LESSEE and LESSEE hereby leases and
hires from LESSOR those certain premises and all appurtenances thereto situated in Kalispell,
Flathead County, Montana, as follows:
All of that property owned by LESSOR and commonly known, referred to and
utilized as the Kalispell City Golf Course. Attached as Exhibit "A" is a map with
the subject premises outlined. Attached is Exhibit "B" which identifies the
boundary and fence line between the golf course and the north portion of the old
Lawrence Park. The total area consists of approximately 240 acres.
2. TERM: TO HAVE AND TO HOLD the above rented premises during the fall
term of twenty (20) years, which term shall begin upon the date above written or the date on
which the agreement is approved by the electors and shall terminate upon the expiration of said
full twenty year term, unless terminated sooner as hereinafter provided.
3. GROSS RECEIPTS: For purposes of this Lease, "Gross Receipts" shall be
defined as all gross receipts obtained by LESSEE from the operation of the driving range (golf
ball rentals), membership fees (season passes), the sale of green fee punch cards and other green
fees. All other receipts shall not be defined as gross receipts under the provisions of this lease
and shall be and remain the sole income of LESSEE.
4. RENT: LESSEE shall pay to LESSOR, as rent, a sum to be determined annually
as herein provided, payable for the preceding year, on or before the 30th day of June,
commencing with June 30, 2010 and continuing on the 30th day of June throughout the term of
this Lease.
The annual rent for the full term of this lease shall be based upon Gross Receipts, as
defined in Section 3, hereof, and be calculated as set forth in "Exhibit C", attached hereto and for
purposes of this Agreement made a part hereof.
Said rent payment shall be mailed or delivered to LESSOR at the Kalispell City Hall. All
prior rents due by LESSEE to LESSOR under that certain lease dated April 1, 1997 are hereby
deemed and agreed to be paid in full and let it be known and agreed that upon approval of this
agreement as provided in section 2, hereof, this lease shall supersede any and all Leases between
the Kalispell Golf Association and the City of Kalispell.
5. USE OF LEASED PREMISES. LESSEE shall use the leased premises for the
primary purpose of operating a municipal golf course. In addition, on March 6, 2006, the City of
Kalispell City Council passed a motion to approve a Multiple -Use Policy for Buffalo Hill Golf
Course, attached hereto as Exhibit "E", which Policy is hereby fully incorporated herein by this
reference. LESSEE agrees to observe all Federal, State and municipal laws and regulations
including those related to human and equal rights and in particular Bureau of Outdoor
Recreation, or its successors, regulations.
LESSEE shall not sublease or assign any portion of the leased premises without prior
written permission of the LESSOR. LESSOR shall not agree to any such sublease or use
agreement unless such lease or use is accessory to the management of a typical golf course. For
example, a restaurant or golf cart concession would be considered such a typical accessory use.
6. MAINTENANCE AND REPAIR OF PREMISES: LESSEE agrees to maintain
the above described premises in as good a condition as the same are in at this time, or as good as
they may be put by LESSOR during the term hereof in case of a casualty loss causing repair or
reconstruction by LESSOR; and to return said property to LESSOR at the expiration of said
lease in said condition, reasonable wear and tear and damage by the elements alone excepted. In
the event LESSEE refuses or neglects to keep the above -mentioned premises in such order and
condition hereinabove mentioned, LESSOR shall have, after first giving ninety (90) days written
notice to repair, the right to declare this lease null and void and of no further force and effect. In
this case the annual payments of rent shall terminate and LESSEE shall not in any way be
responsible for any future rent payments. LESSEE agrees to maintain and keep in repair all water
lines and pumps on said golf course, and to attend to the shutting off of the water supply and
draining of all pipe lines in the fall, and to turn the water in to said system in the spring.
a). Stormwater Regulations: The City of Kalispell, the LESSOR, is mandated by
the federal and state governments to monitor and enforce the Stormwater MS4 Standards within
the city limits of Kalispell. Because of the topography, watercourses and frequent, somewhat
extensive landscaping projects on the Kalispell City Golf Course, it is essential that the KGA
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Superintendent or his designee closely cooperate with the Kalispell Public Works Department to
assure that the MS4 Standards are maintained. For this reason the KGA Superintendent or his
representative shall meet with a representative of the Kalispell Public Works Department for a
training session on an annual basis so that compliance may be maintained. The KGA shall
submit its project stormwater compliance plans to the Kalispell Public Works Department prior
to commencement of such projects. The KGA agrees to remain in full compliance with the MS4
Storm water standards.
b.) Representatives from the KGA and the City's Parks Department and
Department of Public Works shall meet prior to December 31, 2009 to draft a capital protection
program for the property covered by this lease. Items of deferred maintenance shall be identified
as well as any other assets suffering or threatened with damage or devaluation. Estimated costs,
revenue sources and priorities will be developed as a part of a plan to protect and preserve the
assets. In the event that the KGA determines to expend its funds for infrastructure improvements
that are on the capital protection program prior to that time scheduled and that are otherwise
scheduled to be funded by the City of Kalispell, it may apply for a credit of those funds against
its lease payments.
7. (a) City of Kalispell's Access to Golf Course: For the purpose of maintaining public
utilities, the City of Kalispell may from time to time require access to the golf course. In the
event such maintenance is required, the City of Kalispell shall provide adequate written notice to
Kalispell Golf Association by providing the KGA with the bid documents upon advertisement.
In no event shall this information be provided less than 60 days prior to scheduled work. The
written notice shall outline the nature, purpose, access dates, and areas affected on the golf
course. In the event that emergency maintenance is required for the purpose of providing city
utilities, the City of Kalispell shall, upon discovery of need for access/maintenance, provide
immediate written and verbal notice to the, Kalispell Golf Association. Upon notice thereof,
Kalispell Golf Association will grant access for emergency maintenance as requested.
8. ALTERATIONS AND IMPROVEMENTS: LESSEE shall not make any
alterations or improvements to the premises or the appurtenances located thereon in excess of
Twenty -Five Thousand Dollars ($25,000.00) at any one time without having first received
approval from the LESSOR of the intended alteration or improvement. LESSEE shall report to
LESSOR annually on alterations and improvements costing less than $25,000.00.
9. UTILITIES: During the entire term of this lease LESSEE shall pay when due for
required utilities serving the leased premises, including but not limited to, electrical, gas,
telephone, water, sewer and garbage services. LESSEE shall also be entitled to continue use of
LESSOR's appropriated water right of the Stillwater River adjacent to the golf course premises
without charge. LESSEE in using the water from the Stillwater River under said water rights
shall operate and maintain the system and pump for such purposes.
10. PERSONAL PROPERTY AND FIXTURES: All personal property hereinbefore
or hereinafter obtained in connection with the operation and maintenance of the Kalispell City
Golf Course shall be the property of LESSEE; provided, however, that all fixtures that have been
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or may be installed on the premises and attached thereto have or will become part of the
premises and are the property of LESSOR.
11, COST OF OPERATION: All costs of operation including the cost or providing
supplies, equipment, tools, labor and other such items and the entire cost of maintaining and
operating the golf course, the club house and other appurtenances shall be the sole responsibility
of LESSEE.
12. USE OF CLUBHOUSE BY LESSOR: Although LESSEE shall have the
exclusive use and supervision of all buildings on said premises including that structure known as
the clubhouse, it is agreed that LESSOR shall be entitled to use of the clubhouse at any
convenient time to LESSEE upon adequate notice with LESSOR reimbursing LESSEE for all
actual expenses incurred by LESSEE for the reason of any such use by LESSOR.
13. GOLF COURSE FEES: A schedule of membership fees (season passes), green
fees punch cards and other green fees shall be presented by LESSEE to LESSOR prior to the
first day of April of each year of this Lease. The schedule for such fees for the 2009 golfing
season is attached hereto as Exhibit D, and by this reference made a part hereof.
LESSEE, at its discretion, may from year to year, during the term of this Lease, increase
or decrease its Schedule of Fees, then in effect, up to ten percent (10%) without prior approval of
such an increase from LESSOR. LESSOR shall not unreasonably withhold its approval of any
proposed Fee Schedule for which its approval may be required under this Lease.
14. LESSEE'S FINANCIAL REPORTS: Annually, on or before the 30th day of June,
in conjunction with the payment of the annual rent, LESSEE shall present to LESSOR for review
a copy of LESSEE's annual financial report completed in accordance with generally accepted
accounting principles. The Association's financial records will be subject to an audit conducted
by, and at the option of, the City (internal staff or contract auditor). The cost of such audit shall
be paid by the City.
15. LESSEE'S LIABILITY INSURANCE: LESSEE shall obtain and keep in full
force and effect during the term of this lease, full general liability insurance in the amount of One
Million, Five Hundred Thousand Dollars ($1,500,000.00) with a company licensed to do
business in the State of Montana; and said policy of insurance shall name LESSOR as additional
named insured. In the event the Montana legislature increases the limitations on government
liability for damages in tort LESSEE agrees to increase its liability coverage appropriately.
LESSOR shall be furnished with a certificate that such insurance is in force and the same shall
provide for reasonable notification to LESSOR prior to the same being canceled. LESSEE agrees
to hold LESSOR harmless from any and all liability of any nature, whatsoever, arising from or
out of LESSEE's possession, use, maintenance, improvement or occupancy of the property
herein described; LESSEE further agrees to defend, at LESSEE's expense, any action brought
against LESSOR arising out of LESSEE's possession, use, maintenance, improvement or
occupancy of said property.
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16. FIRE INSURANCE: During the full term of this lease, LESSOR shall maintain
its own fire insurance adequate to cover replacement costs on the improvements on said
premises. Should the premises during the term of this lease suffer damages which are covered by
said fire insurance policy, LESSOR agrees to utilize all insurance reimbursements therefore,
toward rebuilding or repairing the damaged premises, or toward providing adequate replacement
facilities. The contents of buildings and fixtures located on the premises shall be insured by
LESSEE and shall be in such amounts as to assure replacement. The parties mutually agree as to
waiver of subrogation rights each with the other.
17. DEFAULT AND BANKRUPTCY: In the event that:
(a) LESSEE shall default in the payment of any installment of rent or other sum
herein specified and such default shall continue for thirty (30) days after written notice thereof-,
or
(b) LESSEE shall default in the observance or performance of any other of
LESSEE's covenants, agreements, or obligations hereunder and such default shall not be
corrected within ninety (90) days after written notice thereof; or
(c) LESSEE shall be declared bankrupt or insolvent according to law, or, if any
assignment shall be made of LESSEE's property for the benefit of creditors;
LESSOR shall have the right thereafter, when such default continues, to re-enter and take
complete possession of the leased premises, according to law, and to declare the term of this
lease ended, and to remove LESSEE's effects, without prejudice. In doing so no additional rent
payments may be collected from LESSEE; however, if LESSEE shall default, after reasonable
notice thereof, in observance or performance of any conditions or covenants on LESSEE's part
to be observed or performed by virtue of any of the provisions in any article of this lease,
LESSOR, without being under any obligation to do so and without thereby waiving such default,
may remedy such default for the account and at the expense of LESSEE.
18. NOTICE: No notice from LESSOR to LESSEE relating to the leased premises or
the occupancy thereof, shall be deemed duly served unless personally served upon or mailed to
LESSEE, registered or certified mail, return receipt requested, postage prepaid, and addressed to
LESSEE at its address as follows:
Manager, Kalispell City Golf Course
Post Office Box 1116
Kalispell, Montana 59903
Any notice from LESSEE to LESSOR relating to the leased premises or the occupancy thereof,
shall be deemed duly served, if personally served upon or if mailed to LESSOR by registered or
certified mail, return receipt requested, postage prepaid, and addressed to LESSOR at the address
as follows:
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Manager Paula Robinson, Flathead County MT by NW 1213/2009 2:58 PM
City of Kalispell
201 First Avenue East
Kalispell, Montana 59903-1997
19. EXISTING LEASE: It is mutually understood and agreed between the parties
hereto that no actions taken or not taken by either party in the negotiation or execution of this
agreement shall constitute a waiver of any rights that either party may now have or hereafter
have relating to or arising out of the existing Lease between the City of Kalispell and the
Kalispell Golf Association dated April 1, 1997; and, and each party specifically reserves the right
to present any claim or defense to any claim relating to or arising out of said Lease.
20. TIME OF ESSENCE AND BINDING EFFECT: It is mutually agreed by and
between the parties hereto that the time of payment shall be an essential part of this lease
agreement, and that all of the covenants and agreements herein contained shall extend to and be
binding upon the parties hereto, and their successors and assigns.
IN WITNESS WHEREOF, the parties have executed this lease as of the date first above
written.
ATTEST:
Theresa White
City Clerk
ATTEST:
01/
'Te-rqilfiams
Association Secretary
CITY OF KALISPELL
(,tane Howington
City Manager
KALISPELL GOLF ASSOCIATION
Doug Kau --man
President
2009
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STATE OF MONTANA Paula Robinson, Flathead county MT by NW 12/3/2009 2-58 PM
ss.
County of Flathead
On this I�Lv�day of >Q,:,\jp,,e,:,-2009, before me, a Notary Public for the State of
Montana, personally appeared Jane M. Howington and Theresa White, respectively, proved to
me to be the persons whose names are subscribed to the within instrument, and acknowledged to
me that they each executed the same in their respective authorized capacities as City Manager
and City Clerk of the City of Kalispell.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year hereinabove first written.
,S1 %
A. P&
..........
SEAL
STATE 0
ss.
County of Flathead
Printed Name:
NOTARY PUBLIC for the State of Montana
Residing at:
My Commission expilres:
' (10A
On thisl day of L'.C. 2009, before me, a Notary Public for the State of
Montana, personally appeared Doug Kauffman and Terry Williams and proved to me to be the
persons whose names are subscribed to the within instrument, and acknowledged to me that they
each executed the same in their respective authorized capacities as President and Secretary of the
Kalispell Golf Association, a Montana not for profit corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and-yeanhereinabove first written.
Printed Name:, �l L±1
NOTARY PUBLIC for the State of Montalia
Residing at: A-cr
My Commission expires: Ct -'2-!1 - 7-C 1
7
AS IC
Exhibit "A"
MAP WITH THE SUBJECT PREMISES OUTLINED
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Exhiblt'T"
VOUNDARY BETWEEN THE GOLF• t THE NORTHPORTION OF a • D
MCE LINE RELOCA!'I s XALISPELL FfUitICIPAL
GOLF COUR58 LhkkExCE PRRiK
Commencing at the " Comer of the Rater Dept.
NAintanance Building is Lavronos Part# thence
N 44' G, 56 teat to the NZ fence corner or th�ey
Nazar Dept. Site in Lawrence Perk, thence 9 680
W, on and slang the existing fence line 50 foot
to a point, thence • IO° a on and along the
existing fame line 243 feet to the point of
beginning of the fence line relocation, thence
along the following courses. N 20' B, 290 Paste
N 3' V. 190 feat, N W N. 47 foot, N 291 V.
103 feat ea s point an the Low Stater Line of the
Stillwater River, said point on the Low heater
Lino of the Stillwater liver being the and of
the fence line relocation.
Low dater Line Of
Stfltvg=_Rs_ver_ HOUr All bearings were obtained through the
nos of a hand compass, All €nfotxatlon hereon
ty'v, vas obtained on November is, 198I.
rSA f+ ea
Point Of Beginning'
Of Fence Line Relocation
�. ;
-------_This Section Of Fence
To Be Removed
N.E. Fence comer Stator
Dept. Site In Lawrence Park
Point On Fence Liner N.B. Corner Valor Dept.
maintenance Building iti
Lawrence Park
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EXHIBIT "C"
Formula for Calculating Annual Lease Payments
1. In determining lease payments the parties shall utilize a rolling average of "Gross
Receipts" over the previous three years in calculating the lease payment for a particular
year.
2. A minimum base lease payment $13,000 shall be payable so long as the rolling average
of "Gross Receipts" as defined under section 3 of the Agreement do not exceed
$750,000.00.
3. In the event the rolling average of "Gross Receipts" exceed $750,000.00 but do not
exceed $850,000.00, the Lease Payment shall be two percent (2%) of said "Gross
Receipts".
4. In the event the rolling average of "Gross Receipts" exceeds $850,000.00 the Lease
Payment shall be two and one-half percent (2 1/2%) of said "Gross Receipts".
Example:
Rolling Average Level I Level 2 Level 3
Gross Revenue Base Lease
$0 — $750,000 $13,000
$750,001 — $850,000 2%
$850,000+ 2.5%
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Exhibit "D"
Buffalo Hill Golf Course
2009 Schedule of Fees
*Membership (Season Pass) 2009 2008
Adult — All 27 holes $659 $599
Adult — Cameron 9 $499 N/A
Student (Full -Time College) $225 $225
Junior (High school Senior and below) $150 $140
* *Green Fees
18 Hole Championship Course $ 53 $50
9 Hole Cameron Course $22 $20
*Above adult season pass rates reflect "regular season" prices. An "early bird" discount rate was
offered in 2008 of $499, and $549 in 2009. In addition, a separate "capital fee" of $125 was
assessed to each adult member
"Above Green fees reflect peak season rates. Discounted rates offered to allow for non -peak
conditions, promotions, and package rates. In addition, (not reflected in the fees above) a $5
capital fee is charged for each 18 hole green fee on the Championship 18, and a $3 capital fee is
charged for each 9 hole green fee.
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Exhibit "E"
Kalispell Golf Course Multiple Use Policy
The Kalispell Golf Association (KGA) leases the golf course from the City of Kalispell for the
purpose of providing the best possible golfing conditions for its paying members and guests. As
a result, the KGA and the City of Kalispell must be responsible for controlling access to the golf
course for both golfers and non -golfers. Personal safety is highest priority.
Golfer Access:
1. Golfers are allowed on the course only during "open tee time" periods as posted in
the Clubhouse
Rational: There are predictable periods of time when the course is closed for maintenance;
consequently, there are no "open tee times" during these periods of time.
2. Golfers are allowed on the course when the course is safe and ready to play as
determined by the Golf Course Maintenance Staff.
Rational: There are environmental conditions that occasionally occur that result in the closure
of the course. For example, heavy rains can cause dangerous soil conditions for golfers and
traffic during saturated soil conditions, resulting in soil compaction, which is detrimental to the
playability of the turf. Frost covered turf can die if traffic is allowed; consequently, the course is
closed until the frost melts. High winds can result in dangerous debris and hazardous trees on
the course; consequently, the course maybe closed until the dangerous conditions have been
corrected. The Goff Course Maintenance Staff is responsible for making the course playable,
and as a result, making the determination when the course is safe to play,
3. Golfers are not allowed on the course when lightning is in the area, as determined
by the Pro Shop Staff.
Rational: Lightning kills golfers every year. The Pro Shop Staff will do it best to close and clear
the golf course when lightning is threatening. The Pro Shop Staff will also determine when the
lightning appears to have left the area, and then re -open the golf course for play.
4. Golfers are not allowed on the course during the nighttime hours when the course is
"open for the season."
Rational. The golf course is irrigated during the nighttime hours. The golf course irrigations
system operates at high pressure (up to 120 PSI). Anyone hit by this high-pressure. high -velocity
water can sustain significant injury and possibly even death, consequently, the course is closed
to non -golfers during the nighttime hours when the course is "open for the season. " Buffalo Hill
Golf Course has significant elevation changes throughout its grounds, and the limited light
during the nighttime hours can impair one's ability to accurately judge the terrain, consequently,
the course is closed to non -golfers during the nighttime hours and when the course is "open for
the season. "
12
5. Golfers are not allowed on the course when the course is "closed for the season" as
determined by the General Manager.
Rational: Once the course is "closed for the season, " other non -golfer activities begin such as
jogging, sledding and skiing. These non -golfers are not aware of the risks golf balls pose and
will not be prepared to look -out for flying golf balls; consequently, when the course is closed for
the season, golfers may not play on the course.
Non -Golfer Access:
1. Non- Golfers activities such as jogging and walking are encouraged when the golf
course is "closed for the season," subject to hours governing city parks, generally
open at 6:00 a.m. and closed at 11:00 p.m.
Rational: Non -golfing activities such as walking and jogging are encouraged when the golf
course is closed far the season, and during hours consistent with other City of Kalispell parks,
2. Skiing and sledding is encouraged when adequate snow cover exists as determined
by the Golf Course Maintenance Staff.
3. Non -Golfers are not allowed on the course during the daylight hours when the
course is "open for the season."
Rational: Golf balls have been clocked at over 150 mph, and typically land with a velocity of
over 50 mph, consequently, flying golf balls pose a significant danger to non -golfers who may
stray into landing zones.
4. Non -Golfers are not allowed on the course during the nighttime hours when the
course is "open for the season."
Rational: The golf course is irrigated during the nighttime hours. The golf course irrigations
system operates at high pressure (up to 120 PSI). Anyone hit by this high-pressure, high -velocity
water can sustain significant injury and possibly even death; consequently, the course is closed
to non -golfers during the nighttime hours when the course is "open for the season. " Buffalo Hill
Golf Course has significant elevation changes throughout its grounds, and the limited light
during the nighttime hours can impair ones ability to accurately judge the terrain, consequently,
the course is closed to non -golfers during the nighttime hours and when the course is "open for
the season, "
5. Non -Golfers are not allowed on the course when frost covered turf conditions exist
even when the course is "closed for the season."
Rational: Frost covered turf can die if traffic is allowed; consequently, the grounds are closed to
all traffic until the frost melts as determined by the Golf Course Maintenance Staff.
Rational: Skiing and sledding can cause damage to the turf when there is inadequate snow
cover, consequently, the course will be closed to skiing and sledding during periods of limited
snow cover as determined by the Golf Course Maintenance Staff.
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6. Consistent with other public golf courses in the area, dogs are not allowed on the
grounds at any time, whether with golfers or non -golfers.
Rational: For purposes of liability and safety of pedestrians, dogs are not allowed on the golf
course at any time, Additionally, fecal deposits pose significant health risks to skiers and
sledders as well as for the Golf Course Maintenance Staff during the turf maintenance seasons,
Damage to turf is also a common result of dog waste. Finally, like a baseball field or football
field, golf course turf is intended for a specific use, as such, dogs and their waste do not belong
on the golf course because both can negatively impact the competition.
This policy is for the benefit and welfare of both the golfing and non -golfing community.
Violations are subject to public ordinance, which may result in fines or other penalties.
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between
CITY OF KALISPELL
A Montana Municipal Corporation
and
THE KALISPELL GOLF ASSOCIATION
A Montana Mutual Benefit Corporation with Members
1. Purpose and Scope
The purpose of this Memorandum of Understanding [MOU] is to establish and
memorialize the understanding between the City of Kalispell [hereinafter the "City"] and
the Kalispell Golf Association [hereinafter "KGA"] regarding the lease between the
parties for that property commonly known as the Buffalo Hill Golf Course.
2. Recital of Facts
A. The City is the fee owner of the real property commonly known as the Buffalo Hill
Golf Club property in Kalispell, Montana, an area of approximately 240 acres, which
is leased, managed and maintained by the KGA.
B. On the 16 1h day of November, 2009 the City and the KGA entered into a twenty (20)
year lease [hereinafter the "Lease"].
C. Pursuant to the Lease, the KGA is required to provide an annual lease payment to the
City of Kalispell determined by formula based upon the annual gross receipts of the
KGA.
D. The Lease further requires the development of a Capital Protection Program that
identifies assets, revenue sources, and priorities of the property-
E. It has been the intent of the City to utilize the lease payments from the KGA to fund
maintenance obligations that are determined to be the City's responsibility.
F. The KGA may, pursuant to the terms of the Lease, make improvements to the
property that have been identified and scheduled in the Capital Protection Plan to be
funded by the City of Kalispell and apply to City Council for a credit of those funds
expended on said improvements against its lease payment.
Page 1 of 3
NOW THEREFORE, it is the desire of the parties to enter into this Memorandum of
Understanding setting forth a method to streamline this portion of the Lease process.
3. MOU Term
The term of this MOU Agreement coincides with the term of the Lease. Either party may
terminate this MOU Agreement by providing six (6) months' notice to the other party.
4. Use of Lease Payment
The KGA shall retain the lease payment as identified in Section 4 of the Lease. In
consideration for this, the KGA shall assume responsibilities for any and all obligations
that would otherwise be funded by the City of Kalispell as identified in Section 6(b) of
the Lease between the City of Kalispell and the KGA.
5. No Modification or Amendment to the Lease
This MOU is not intended to modify or amend the Lease in any way but is rather
clarifying the intent of the parties on the desired method in which the Lease shall be
implemented.
6. City Responsibilities
The City shall continue to abide by all terms of the lease and such clarifications of the
lease as this MOU provides. The City, as owner of the subject property, shall, with the
KGA, cooperatively pursue grant funding, as it becomes available, that best serves the
City's interests, for the purposes of preserving the value of the property.
7. KGA Responsibilities
The KGA shall continue to abide by all terms of the lease and such clarifications of the
lease as this MOU provides. The KGA, as Lessee of the subject property, shall, with the
City, cooperatively pursue grant funding, as it becomes available, that best serves the
City's interests, for the purposes of preserving the value of the property.
8. No Third -Party Beneficiary
This Agreement is for the exclusive benefit of the parties, does not constitute a third -
party beneficiary agreement, and may not be relied upon or enforced by a third party.
9. Modification and Termination
Any and all amendments must be made in writing and must be agreed to and executed by
the parties before becoming effective.
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10. Effective Date and Signature
This MOU shall be effective upon the signature of the City and the KGA authorized
officials. The City and KGA indicate agreement with this MOU by their signatures.
Signatures and dates
Authorized Signature of the City
Doug Russell, City Manager
Date
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c°S 4,4
Aut orized S�iWat6re of the KGA
Date