2001-10-11
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CITY OF ENCINIT AS
ENCINITAS RANCH GOLF AUTHORITY
MINUTES OF SPECIAL MEETING
Lilac Room, Civic Center
505 South Vulcan Avenue
THURSDAY, OCTOBER 11, 2001 at 3:00 P.M.
CALL TO ORDER/ROLL CALL
Chairman Kaiser called the meeting to order at 3:03 p.m.
Directors Present:
Ed Kaiser, Susan Lamson, Kerry Miller and David Wigginton
Director Absent:
Alan Archibald.
Also Present:
John White, Carltas Co.; Bill Huck and Kenneth Holman, Stone &
Youngberg; Tom Johnsen, Fieldman & Rolapp; John McNair, JC
Resorts; Staff Leslie Suelter, Nancy Sullivan and Pat Drew,
Recording Secretary.
ORAL COMMUNICATION [3 minutes for each speaker. Maximum 15 minutes
for oral communication.]
None.
AGENDIZED BUSINESS ITEMS
1.
Approve Minutes of Special Meeting of August 30, 2001.
Next meeting.
2.
Update on Bond Refinancing.
(Leslie SuelterfTom Johnsen/Bill Huck)
Ms. Suelter said there had been a turndown in the market although the Finance
Team has been continuing to work on the bond issue. She said the bond market
is completely different to what it was the previous month and some of that has had
some unfortunate impact on ERGA's planned issuance in terms of the market
slowing down.
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Mr. Johnsen indicated that the transaction that the team had brought to the Board
in August is not going to work and they would like to come back at the next
regularly scheduled meeting with Plan B.
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Mr. Huck distributed a graph showing a summary of yield trends from January
2001 to October, and explained the numbers. It was agreed that about half of the
originally anticipated savings had been lost in the past weeks.
Mr. Johnsen said they had been giving serious thought as to what options they
could bring back to the Board.. He said that he knows that the Board wants to be
sure that going through this exercise of a refunding is a cost- effective exercise.
Ms. Suelter gave her analysis of the situation, saying that if as John McNair is
saying, the golf market is getting a little bit soft, and with these kinds of numbers,
can ERGA afford to do this now, considering that there is an alternative to getting
the bridge built. Early on when they first started talking to the Board it was
questioned whether ERGA was wasting its one and only advance refunding
opportunity. She said that personally, she was uncomfortable with the numbers if
in fact the golf market is going to get soft. It was her recommendation that the
Board look at the issue from this perspective, under the scenario they were looking
at, i.e. if the Board is going to borrow the money get it paid off quickly.
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Director Miller said he agreed entirely with Ms. Suelter's comments. He said at the
last presentation they were debating at that time whether the saving was beneficial
enough to take advantage of the one opportunity that is available right now, or
whether it would be better to be patient and see what happens in the future and
maybe able to improve the benefit at a later date. He felt that the new numbers
that had been presented to the Board put it back into a very marginal area and he,
personally, would rather hold out and see if ERGA couldn't ride the market and
see if there isn't a better window of opportunity in the future. Right now he is not
comfortable with the numbers.
Director Wigginton said he agreed and felt that time was on our side. He did not
have a sense of urgency about the matter. Chairman Kaiser said he also agreed.
Ms. Suelter stated that as she was hearing the comments, the Board does not
wish to go forward.
Ms. Suelter said that she understands that her assignment is to follow up with Bill
Madison about how to achieve the ability to increase the amount in capital
reserves. Can this still be done if not revising the Indenture at this point, or does it
have to be delayed. The Finance Team is going to continue to watch the market
to see if there is anything that could be done before November 1, although not
likely. They will get back to the Board probably within the next 6-8 months, and
John McNair and she need to talk some more about the backup strategy for
getting the bridge built. They will be back to the Board with something more
definitive, probably at the next Board meeting.
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3.
Director Miller told the Finance Team that the Board is going to leave it to their
discretion as to whether they should engage Alliance in any further discussions.
The Finance Team left the meeting at 4:02 p.m.
Approve Resolution No. 02-01 -
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ENCINIT AS
RANCH GOLF AUTHORITY AUTHORIZING THE ISSUANCE AND SALE OF
NOT TO EXCEED $13,000,000 PRINCIPAL AMOUNT OF REVENUE
REFUNDING BONDS, APPROVING RELATED INDENTURE OF TRUST,
TERMINATION AGREEMENT, SITE LEASE, LEASE AGREEMENT, ESCROW
AGREEMENT, AMENDMENT TO MANAGEMENT AGREEMENT, OFFICIAL
STATEMENT AND BOND PURCHASE AGREEMENT, AND AUTHORIZING
RELATED DOCUMENTS AND OFFICIAL ACTIONS.
No Action.
4.
Review Summary of August and September 2001 Revenues and Expenditures
Financial Statement. (John McNair)
Mr. McNair reviewed the Financial Statements for August and September.
August numbers were total revenue of $478,848 compared to $442,176 for 108%
of budget; expenditures were $275,554 compared to $270,532 or 102% of budget;
net income was $202,086 compared to $169,978 or 119% of budget; total rounds
were 7,359 compared to a budget of 7,110 or 104% of budget.
For September revenue was down 10% from budget. Total revenue was
$343,293 compared to budget of $380,966 or 90% of the budget; expenditures
were $243,865 compared to a budget of $256,732 or 95% of budget; Net Income
was $97,964 compared to a budget of $122,567 or 80% of budget. Total rounds
were 5,035 compared to a budget of 5,678 or 89% of budget.
Year to date revenues are $1,321,938 compared to a budget of $1,312,573 or
101 % of budget; expenditures are $791,683 compared to $802,598 or 99% of
budget; net income was $526,326 compared to a budget of $504,974 or 104% of
budget; total rounds for the year to date are 20,038 compared to a budget of
20,443 or 98%.
5.
Review Costs for New Restrooms.
(David Wigginton/John McNair)
Mr. McNair advised that he and Director Wigginton had reviewed the estimates
that had been presented at the August board meeting. They decided to move
forward with the bid from Restroom Facilities Corporation, which was about a
$60,000 savings compared to the bid from Romtec. Total would be $170,553 with
a concession stand at the 2nd hole restroom. He reminded the Board members
that liquor may not be transported across the highway nor across the bridge.
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Mr. Wigginton suggested that since the City owns the golf course property (it is
leased by ERGA) he felt that as soon as the Board decides what it wants for the
restrooms, he could then proceed to apply for a financial grant.
Chairman Kaiser agreed that the plan that had been presented is probably the one
the Board will go with but it will have to be put on hold for the time being.
Entry Way Gate/Entry Improvements
(Mark Warren)
Mr. McNair said that Mark Warren has had the architect out to take a look at the
location. The first drawings will be done on October 18. He asked if the Board
wished to create a subcommittee with one or two Board members to get with Mark
Warren and/or himself to review the drawings to see which way they want to go or
just wait for the next board meeting. Chairman Kaiser said to bring back to the
next board meeting for review.
Pay Telephone Contract.
(John McNair)
Mr. McNair advised that their pay phone service agreement is up for renewal at the
same rates as the current agreement. However, because it is a two-year
agreement he had to bring to the Board for approval. Director Wigginton said that
he could put Mr. McNair in touch with the person who supplies the pay phones for
the City's parks and get a good deal. Mr. McNair agreed that he would hold off on
signing the contract.
Director Wigginton moved that the Chairman be authorized to sign a pay
telephone contract, whichever contract offers the best deal in the best
interests of ERGA, seconded by Director Miller. Approved 4-1 (Archibald).
8.
Cell Towers.
(John McNair)
Mr. McNair advised that Nextel has come back to him. They really would like to
have a tower at the corner of Quail and leucadia Boulevard and he felt they would
be willing to pay high dollars. He told them no. Director Miller said that the
situation is a bit different now. The City Council has adopted the cell ordinance so
now there are standards to work with.
Director Miller asked if Nextel or JC Resorts has a location in mind. Mr. McNair
said that the decision is two-fold. Number one is location and the second thing is
price. There are basically three different spots that could be considered. His first
choice would be up by the water tower at the back of the driving range. It must be
remembered that they need access. The second one is possibly by the
clubhouse but this would not be his recommendation. Another option would be on
the driving range at the back of the golf school, on the poles. There was
discussion about possibly giving a twenty-year contract.
Mr. McNair was authorized to work with General Counsel Glenn Sabine on a
contract. He will prepare a twenty-year lease with the proposal that Nextel
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advance $170,000 on the total rental. Location would be an underground vault
using the poles at the north end of the driving range,
Chairman Kaiser moved that Director Wigginton be authorized to execute an
agreement, seconded by Director Wigginton. Approved 4-1 (Archibald)
Incidents and Accidents.
(John McNair)
None.
Potential Course Enhancements.
None.
Discussion/Direction Concerning Course Operations, Conditions Needing Change.
Mr. McNair said that he and Mark Warren had looked at the 18th green where there
is a major problem. To repair it they are going to have to pull up the sod, repair the
pipes and re-sod.
Mr. McNair and Mark Warren were requested to make a presentation on the
irrigation problem at a future meeting.
12.
Directors Reports.
[For reported topics not described on this agenda, State law prohibits Board
discussion, responses, and action. A Boardmember may ask questions, but
only to clarify what the speaker is reporting.]
13.
Next Meeting - Thursday, November 15, 2001 at 3:00 p.m.
December meeting changed to Thursday, December 20 at 3 p.m. due to
Christmas Holidays.
14.
Adjournment.
Chairman Kaiser adjourned the meeting at 5:00 p.m.
Respectfully submitted,
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Edward Kaiser
Chairman of the Board
Patricia Drew
Recording Secretary
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