Auditor Rips Denver Parks and Rec Over Golf Course Contracts

A recent report from the city auditor's office found several weaknesses in the way that Denver Parks and Recreation handles its contracts with private companies — particularly in its concession agreements on city-owned golf courses, which appear to be at odds with established city practices and offer wildly varying terms to vendors, including one contract for food and beverage services that runs for up to fifty years.

The report has received little public attention but has been seized upon by park activists who oppose the city's plan to build a thirty-acre stormwater runoff "detention area" in City Park Golf Course — a move that would close the course for two years and involve bulldozing hundreds of trees and possibly relocating the clubhouse, built in 2002 at a cost of more than $3 million. The plan is a critical component of a controversial, $383 million stormwater mitigation project that has been sharply criticized by neighborhood groups but received approval (including a sharp hike in stormwater fees) from the Denver City Council last spring. 

Denver Public Works officials say the project is needed to protect northeast Denver neighborhoods, including Elyria and Swansea, from flooding during a hundred-year storm event. Opponents insist that residents will get little relief from the drainage improvements, which they believe are being driven by the need to provide hundred-year flood protection for the below-grade I-70 expansion in east Denver. (The project also benefits the planned billion-dollar makeover of the National Western Center and other industrial areas slated for redevelopment along RTD's new DIA line.) A lawsuit filed in Denver District Court challenges the construction slated at City Park Golf Course as an improper "alienation of parkland." 

The report issued by Denver Auditor Timothy O'Brien doesn't mention City Park Golf Course specifically, but it does raise questions about overall management policies at Denver Parks and Rec. According to the report, DPR doesn't have consistent policies in place for administering and monitoring its 460 contracts with private vendors, which range from operators of boat rentals to on-call landscape services to food-and-beverage concessions at the Echo Lake restaurant on Mount Evans. The auditors found the tracking of contract expenditures to be inadequate and some confusion over who was overseeing particular contracts. 

Particularly revealing, though, were what the report refers to as "unique contract terms" — a gentler phrase than "sweetheart deals" — in the area of golf-course concession arrangements. Although contracts with the city are supposed to be limited to thee to five years except for special circumstances, the contract for the Wellshire Golf Course has a thirty-year term, with options to extend the contract for two additional ten-year periods. In addition, that contract allows for a transfer of the concessions license without city approval; as the report notes, "This could result in a situation where the license is owned by individuals that the City did not originally contract with or approve."

Compensation for the city also varies widely from contract to contract. The deal for Wellshire requires the concessionaire to pay a flat annual rental fee, set at $50,000 for 2015. But the agreement for the Evergreen Golf Course requires that the concessionaire pay the City of Denver $25,000 or 8 percent of gross revenues, whichever is higher. In 2015, the Evergreen operator paid around $115,000 for the concession — more than double the Wellshire payment, even though Wellshire's gross revenues were higher. 

But the Evergreen deal has its own peculiarities, too. One provision allows employees of the concessionaire to occupy an on-site residence on the mountain course. 

In a written response to the audit findings, DPR executive director Allegra "Happy" Haynes defended the unusual contract terms, saying that the on-site residence is a component of the concession contract and that different sites require different business models. But for City Park neighbors concerned about the future of the golf course, the audit provides one more reason for questioning who's watching the store over at Parks and Rec.