Golf course contractor is out; Palmer city will now manage golfing

The city of Palmer has taken over management of the Palmer golf course after its long-time contractor, Eagle Golf Course Management, was unable to agree to new contract terms set by the city in January.

Palmer Mayor Jim Cooper posted a letter March 4 to allay fears that the contract termination would impair the seasonal opening of the course. “The city is committed to opening the Palmer Municipal Golf Course for the 2026 season and continuing to serve residents and guests,” Cooper said in the letter.

With the contract gone the golf course will now be operated as a city department under the management of Palmer’s director of community development, city manager Kolby Zerkel said in an interview with Big Cabbage Radio, Palmer’s community station. Golf course hiring decisions for summer employees will be made by the city’s human resources director, Zerkel said in the interview.

Eagle Golf had managed the city-owned golf course for 18 years and in 2025 returned a $359,000 profit to the city. The company’s contract was up for its periodic renewal. Palmer’s city council had set forth contract changes in meetings in December and January that Eagle Golf Course found acceptable, said company president George Collum.

However, when city officials sent a final contract in January there were changes that went beyond what the council had agreed to, Collum said. When he was unable to accept the changes the contract ended Feb. 2. Collum said he felt many of the changes reduced Eagle Golf’s control of golf course operations and put it in the hands of city officials. An important change was deletion of a clause for the city to pay fuel costs, which typically run to $20,000 a year. That provision was in the draft contract agreed to by the city council earlier but had been changed when Collum received the final contract from the city.

Collum said the city’s proposed contract changes amounted to “a substantially rewritten agreement containing significant different and additional terms that were never discussed or approved by the city council. Among other things, the proposed contract required two completely separate point-of-sale systems for city and contractor transactions, meaning a customer paying green fees and buying a sleeve of golf balls would need to complete two entirely separate transactions,” Collum said in a statement.

There were also new reporting and operational requirements beyond anything in the prior contract, he said. Eagle Management had accepted many of the city’s terms and worked toward compromises that would preserving the operational framework of the previous contract. But then, “the city presented Eagle Golf with a take-it-or-leave-it offer and a deadline of 5 p.m. March 2 to accept. The city advised that no counterproposal or changes of any kind would be entertained,” Collum said.

City manager Kolby Zerkel has a different perspective, however: “The contract terms presented to Eagle Golf are commonly used in municipal agreements and clarified ambiguous language in the prior contract, which did not adequately protect either the city or the contractor. The proposed changes strengthened accountability measures, such as regular reporting on City revenues by the contractor,” she said in a statement.

“The operations and management fee paid by the city in prior agreements, including the 2025 agreement of $425,000, covered operational costs such as fuel. The proposed 2026 agreement increased the operations and management fee by $50,000 to $475,000, and the City did not place restrictions on how the contractor allocated those funds. The contractor retained full discretion to spend those funds on expenses such as fuel, administrative costs, or other business needs associated with managing the course,” Zerkel said.

“Importantly, the proposed agreement also retained several significant provisions that benefited the contractor. The city would have continued covering all utility costs, including those directly tied to the contractor’s private revenue operations at the facility, allowed the contractor free use of the publicly owned golf course clubhouse to conduct operations, and permitted continued free use of City-owned equipment necessary for course maintenance and operations,” she said.

“Nothing in the proposed contract shifted operational control of the golf course away from the contractor. The contractor would have retained full authority to manage day-to-day golf course operations and its employees. The prior agreement stated that the contractor would review and recommend prices for greens fees, cart fees, and driving range fees to ensure golf course operations were supported by revenue. The proposed agreement simply added language clarifying that the city sets the rates, reflecting the practice the contractor acknowledged was already in place,” Zerkel said.

She also said: “Having separate transactions for different vendors or services is not unusual. Stores like Fred Meyer process groceries, pharmacy, and liquor purchases through separate transactions, and events such as the Alaska State Fair or Friday Fling require separate transactions with individual vendors,” Zerkel said/

“The prior agreement also allowed the contractor to manage beer and wine sales under the city’s golf course liquor license while retaining the associated profits. Provisions related to that arrangement were removed after City management recognized the practice was unlawful under state law. That understanding was reinforced through review by the city’s legal counsel,” she said.

Negotiations stalled after the contractor declined to accept terms requiring the separation of contractor private sales from city sales, the use of separate bank accounts to prevent mixing contractor and City funds, payment of credit card processing fees,” Zerkel said.

Collum said it was a disappointing end to a long relationship. “It was a difficult decision to end the contract. Given the fact that the contract being offered contained terms that were significantly different from the prior agreement and went beyond changes authorized by the council, Eagle Golf made the difficult decision not to sign,” he said.

Mayor Cooper reinforced Zerkel’s position: ““The city worked with legal counsel to update several provisions to align with standard municipal practices. The updates included requirements for the separation of city revenues from private contractor revenues through the use of separate bank accounts, financial reporting consistent with Generally Accepted Accounting Principles, or GAAP, regular reporting on city revenues, access to city facilities and compliance with federal and state laws and regulations,” Cooper said in his letter.

“Although these provisions differ from the 2025 agreement (with Eagle Management) they are necessary and standard inclusions,” Cooper said.

For his part, Collum said he wanted to, “thank the Palmer golfing community for your incredible support support over the years. Every round played, every tournament, every season pass renewed, that was you investing in this course, and we are grateful. Eagle Golf will remain involved in the golfing community, and we are still open to a solution that works for both the city and Eagle Golf.”

“We know this is not the news anyone wanted to hear. It is not the outcome we wanted, either,” Collum said.