2001-06-28
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CITY OF ENCINIT AS
ENCINITAS RANCH GOLF AUTHORITY
MINUTES OF REGULAR MEETING
Carnation Room, Civic Center
505 South Vulcan Avenue
THURSDAY, JUNE 28, 2001at 4:00 p.m.
CALL TO ORDER/ROLL CALL
Chairman Kaiser called the meeting to order at 4:07 p.m.
Directors Present:
Edward Kaiser, Susan Lamson, Alan Archibald and David
Wigginton.
Director Kerry Miller joined the meeting at 4:26 p.m.
Also Present:
John White, Carltas Co.; John McNair, Rod Linville, Mark
Warren, J.C. Resorts; David Root of Toll Brothers; Harry
Messner of Ivy Landscape; Tom Johnson, Fieldman, Rolapp
& Associates; Staff members Phil Cotton, Parks & Rec.,
Leslie Suelter and Nancy Sullivan, Finance Div; Pat Drew,
Board Secretary.
ORAL COMMUNICATION [3 minutes for each speaker. Maximum 15 minutes
for oral communication.]
None
AGENDIZED BUSINESS ITEMS
TAKEN OUT OF ORDER
7. Update on Quail Gardens Bridge.
(John Nabors)
Chairman Kaiser advised that Mr. Nabors was unable to be at the meeting but that
he had left a telephonic report.
1) The preliminary plans will go to the Planning Department on Friday for
informal review as requested by Planning Commissioner Les Bagg.
Construction plans go to the City for the first plan check on July 11.
Assuming two 30-day plan check cycle, the bridge will be delivered in
November for completion by January 2002.
He will make a formal presentation at the July board meeting.
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4)
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1.
Approve Minutes of Regular Meeting of May 24, 2001.
Director Archibald moved approval of the minutes of the May 24, 2001
regular meeting, seconded by Director Wigginton. Approved 4-0-1 (Miller)
2.
Review Summary of May, 2001 Revenues and Expenditures/Financial Statement.
(Rod Linville/John McNair)
Mr. Linville reviewed the May 2001 summary of the financial statement and
distributed copies of the approved FlY 2001-02 budget.
Total revenues for the month were $414,520 compared to a budget of $393,874 or
105% of the budget; total expenditures were $255,983 compared to a budget of
$240,976 or 106% of budget; net income for the month was $162,568 compared
to a budget of $150,614 or 108% of budget; total rounds for the month were 6,763
compared to a budget of 6,670 or 101 % of budget. Year to date net income is
$1,513,700 compared to a budget of $1,334,123 or 113% of budget; and total
rounds to date were 63,680 compared to a budget of 65,075 or 98% of budget.
3.
Update on Bond Refinancing.
(Leslie Suelter)
Ms. Suelter said she felt that the minutes of the last meeting clearly reflected all of
the discussion on the bond refinancing. She asked Mr. Johnson to detail the
schedule for the refunding.
Mr. Johnson advised that since the May board meeting the market study had been
initiated and will actually be done a little sooner than anticipated. He had talked to
the person doing the study and had asked him how the golf course looked from his
perspective. While all the numbers had not been punched in, the response was
that on a scale of 1-100 the golf course is a 100 for its success rate. Ms. Suelter
said she had talked to him and he was amazed at how well the course is doing.
By every measure it is exceeding expectations.
Mr. Johnson said there had been a distribution of the first draft of the legal
documents that sets the template for the structure of the financing; they are in the
review process at the present time. A meeting is scheduled for about July 10 to
discuss the documents. By that time they should also have the first draft of the
preliminary Official Statement, the disclosure document that describes to the
market the circumstances of the golf course, the bond structure etc. It is the
marketing instrument that the underwriters will use in selling the bonds.
Mr. Johnson said that they would need a meeting early in August but the earliest
they could come back to the Directors would be August 16. The Secretary was
requested to poll the Directors to see if they would be available on the 16tti. Mr.
Johnson said that what needs to be done is for all the bond documents - the
Official Statement - to be approved by the Board before it can be distributed to the
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public. It has to be approved in a "near final" form. Before bonds can be marketed
and before they are priced they need to come back to the board for the approval.
On a question by Director Archibald relative to what costs ERGA would be
exposed to if the Board did not go ahead with the bonds, Ms. Suelter advised that
all fees are contingent with the exception of the $12,200 for the Market Advisor.
Director Archibald made the recommendation that the Board approve going
forward knowing that $12,200 is the outer limit of the exposure if the bond does not
sell.
4.
Approval of Consultant Services Contracts for Financial Advisor (Field man Rolapp
& Associates), Bond Counsel (Jones Hall), Disclosure Counsel (Best Best &
Krieger), and Market Study Consultant (Economic Research Association).
(Leslie Suelter)
Chairman Kaiser said he would recommend using the wording in the staff report as
the motion.
Director Kaiser moved that the ERGA Board Chairman be directed to sign
the contracts for retaining Financial Advisor (Field man, Rolapp &
Associates), Bond Counsel (Jones Hall), Disclosure Counsel (Best Best &
Krieger LLP), and Economics Research Associates, to Pursue Refunding of
the Encinitas Ranch Golf Authority Revenue Bonds, 1996 Series A. Director
Archibald seconded the motion. Approved 4-1-0 (Miller)
Director Miller joined the meeting at 4:26 p.m.
TAKEN OUT OF ORDER
9.
Approval of Plans for the Trail along Holes 2, 3 and 4.
(Alan Archibald)
Director Archibald advised that he and JC Resorts have had an on-going dialogue
with Cornerstone Communities and subsequent developers of all of the
development in the South Mesa. The easements have been modified so that they
can encroach two feet into the golf course rather than ten feet. However, to
construct the trail easement they will have to do some grading on the golf course.
They have had Phil Cotton and Mark Warren meet with the people who are
actually going to do the work. Planning Department has also been involved from
the standpoint of augmenting the landscaping adjacent to the trail so that the trail
kind of disappears. It's actually recessed in some areas and the fencing has then
been lowered because of the recessing of the trail. They plan to add some
landscaping in certain areas to help hide the fencing.
David Root of Toll Brothers advised that they are going to be the developer of a
portion of the South Mesa. Their landscape architect, Ivy Landscape, has been
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working on plans on which they hope to get a favorable agreement from the ERGA
board.
Mr. Cotton said that they have worked on the location of the fences for quite some
time and concur with the current proposal. The Planning Department had some
problem with the fencing travelling the whole length of that particular piece of trail.
The proposed plan is the next evolution from when the ERGA board saw it last.
They have tried to hide the fencing as much as they can.
Mark Warren suggested that the Board may wish to consider at some point
whether they want to have the PVC fence that goes along the maintenance area,
or even something more simple such as a split rail fence, to act as a demarcation
point.
Director Archibald said that there has been a problem with people getting on to the
golf course from the trail. This is an issue with almost every course that doesn't
have a demarcation point between the golf course and the trail. Our General
Counsel/City Attorney has advised that as long as the trail is adequately signed to
say, for example, "going beyond this point you are going onto golf course property
- no trespassing" then we are okay from a liability standpoint. However, he didn't
feel that it was okay if people just decided to walk the cart path instead of the trail
because it was more attractive. The interest of the board is to keep unauthorized
people off the golf course and for them to not mistake the cart path for the trail.
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Diane Langager of the Planning Department joined the meeting at this point.
Director Archibald asked Ms. Langager to discuss the Planning Department's
position regarding continuous fencing along holes 2, 3 and 4. She said staffs
concern has always been the visual appearance of having fencing along the whole
area. They hoped to keep it without any obstruction and had come up with a
compromise and hoped that it could be free of fencing as much as possible.
Director Archibald asked Ms. Langager if they put in a three or four foot black vinyl
chain link fence where right now there is no plan for putting fences, plus some
shrubs adjacent to it, would that mitigate what Mark Warren was saying about
people wandering from the trail onto the golf course and yet still satisfy the
Planning Department's concern. Ms. Langager explained that staffs preference
would be that where there is not a safety issue there is no fencing and instead use
signage. It was also recognized that shrubs would not keep people from going
onto the golf course.
Mr. Cotton said he is concerned that the trail does not become a tunnel. He likes
Mark Warren's suggestion with regard to those areas that are open to go with split
rail fencing and appropriate signage.
Director Archibald said that the Board needs to determine what needs to be done
on the boundary between the trail and the golf course. That's the only discretion
that ERGA has; it cannot limit access to the trail.
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Director Miller said that it's only a very small section of the boundary that is under
discussion; the vast majority is already proposed to be fenced. He said he couldn't
see what would be accomplished by leaving that small piece open when the
solution is just a three-foot high fence and which, for all intents and purposes, isn't
even observable.
Director Miller asked Ms. Langager if it would be a real issue if in the two small
areas that currently aren't fenced at all, there was a three-foot high black vinyl
chain/ink fence which would serve to demarcate the trail boundary from the golf
course boundary. He said the objective was to try to discourage unauthorized
entry onto the golf fence. As Mr. White pointed out, fencing would be more likely
to keep off-the-Ieash dogs from running onto the golf course. Ms. Langager
agreed that a three-foot fence would probably be more effective than just signage.
Mr. McNair said he would recommend a four-foot fence since it would be harder
for people to step over. Director Archibald agreed with the idea of a four-foot
fence.
Ms. Langager said she would like to throw out a new thought. She wondered if the
Board could come up with a split rail fencing so that it would keep a more open
appearance and won't feel so closed in.
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Director Archibald moved that the Board go forward with the proposed plan.
In the areas where there is no fencing because it isn't needed for protection,
that a four-foot black vinyl fencing be added. If it is later determined that it is
not needed then the golf course can do the screening to make the fence go
away, but not to require the developer to do it. Director Wigginton seconded
for discussion.
Director Miller said he would vote against it. In terms of what needs to be done
today, does this need to be decided before this project can go forward? The
objective is worthy and important and he would be interested to see if Planning
staff could come up with a suggestion or two that would achieve the Board's
objective. Maybe it would end up by being a three-foot chainlink fence. He asked
Ms. Langager if she would like to have the opportunity to investigate further or is
she comfortable with the Board proceeding with a motion.
Ms. Langager said that if the Board wants to have the Toll Brothers to do the
installation, it really does need to get on their plans now. If the Board is going to
go with the fence she would ask that it be a three-foot fence. She understood
what directors were saying and the liability involved but she would still ask for a
three-foot fence. Director Miller said he would support this.
Director Archibald said he would amend his resolution to three-foot fencing.
Seconded by Director Wigginton.
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Chairman Kaiser asked if there was an issue with the type of planting.
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Mr. Messner of Ivy Landscape described the plants and bushes that they plan to
use. He said they have reviewed the preliminary planting pallet with Mr. Cotton,
and reviewed with the Board the representation of the plants that are being
proposed. While they are not all native plants, they are all drought tolerant.
Director Wigginton said that he wanted to share his thinking. The primary
responsibility of the ERGA Board is to see that the golf course succeeds. He
understands the concept of the trail experience but there are places elsewhere on
the course, for instance up on the hill behind the driving range, where one can get
a 100% open trail experience. The point that he would like to make is that when
solving one problem and another one is created, one is really not solving the
problem at all. So question would be, which problem should the board be
focusing on. He feels the Board has a commitment to the golf course
management company to see that their interests are protected, and that they are
allowed every opportunity to maximize their revenues so that we can not only pay
off ERGA's debt but also to make the needed improvements on the course. He
doesn't see anyone being cheated from the trail experience. At the most maybe
1500 feet but that's all, and it can be had before and after the point under
discussion. He does understand the point about entering the course illegally and
shagging the balls on the green. As Chairman Kaiser said, with all the new homes
going in there will be a lot of people flocking onto the golf course, taking their dogs
and hitting balls, especially in the evening when the course is not occupied.
Director Archibald called for the question, saying there is a motion on the floor
and a second, to go with the proposed plan plus three-foot black vinyl small-
mesh fencing, where there is not now fencing included in the plan. If it's
found to be a problem in the future it can be addressed at that time.
Approved 3-2 (Wigginton, Kaiser)
Director Wigginton said he didn't feel all alternatives had been explored and
wondered if they had chosen the right one. He's not comfortable that all
alternatives had been explored.
Ms. Langager said discussion had being going on for a number of months.
Obviously the solution was that they were only putting safety fencing in where it
was needed. The issue was that security fencing came up and it was discussed
with the City Attorney and the idea was that signage was the alternative.
Director Miller said that he felt when the discussion began that the idea was to
create a demarcation so that people cannot say they didn't know where the golf
course was. It was to create a boundary so they know they are crossing a
boundary.
Director Miller left the meeting at 5:15 to go to another meeting.
5.
Discussion on Raising the Capital Reserve Allocation.
(Chairman Kaiser)
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Chairman Kaiser said he was concerned that the golf course does not yet have
rest rooms. The Board is always in the position of not having enough money for
them. With the houses going in and the course being three years old it is not right
that the Board doesn't have the money. He recommended to the Board that for a
short time the capital reserve fund be increased from the current 2Y2 % of gross
revenues to 4 or 5% in order to make the improvements that are needed. He
appreciates that this would cut into Carltas' sales tax revenue but believes it could
be a temporary situation until some of the needed major improvements are done.
Chairman Kaiser moved that the Board approve an increase in the capital
reserve fund from 2%% to 5% for the coming fiscal year with the
understanding that it can be lowered or changed at any time. It will
automatically go back to 2-%% next year unless re-authorized at that time.
Seconded by Director Wigginton. Approved 4-0-1 (Miller)
Mr. White said that he felt the golf course is definitely enhanced by having
restrooms. He is okay with it if that money is earmarked to build restrooms. What
he wouldn't want to see is an increase in capital reserves to build such things as
fountains which wouldn't necessarily make the golf course experience that much
better. Restrooms certainly would. But he would like to make sure that it is
reviewed at a certain time to see how the cash flow is going because even under
scenario three that was adopted for the golf course refinance, there is a significant
risk to Carltas in terms of money owed to repay the sales tax at the end of the year
2013. Therefore, he would ask the Board to look at it in a year.
Chairman Kaiser said that there was approximately $18,000 in the capital reserve
fund right now, and with the 5% a month it would be adding roughly $20,000 per
month to the fund. Mr. McNair was asked to come back with some bids for two
restrooms. Discussion of the Capital Reserve Budget is to be on the next agenda.
Discussion on Nextel Offer.
(Mark Warren/John McNair)
Item cancelled.
Update on Monument Sign.
(Alan Archibald)
Director Archibald reported that Cornerstone has got the foundation in for the golf
course entry sign. They have a contractor and all the permits they need, just
waiting for them to do the job.
Incidents and Accidents.
(Rod Linville)
Nothing to report.
Potential Course Enhancements.
Nothing to report.
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15.
Discussion/Direction Concerning Course Operations, Conditions Needing Change.
Nothing to report.
Directors and/or Manager 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.]
Nothing to report.
Next Meeting - Thursday, July 19, 2001 at 3:00 p.m.
Adjournment
Chairman Kaiser adjourned the meeting at 5:31 p.m.
Respectfully submitted,
Q~k~
Patricia Drew, Board Secretary
'/~'~!I?'
Edward Kaiser, Chairman
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