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2001-01-25 . . . CITY OF ENCINITAS ENCINITAS RANCH GOLF AUTHORITY MINUTES OF REGULAR MEETING Carnation Room, Civic Center 505 South Vulcan Avenue THURSDAY. JANUARY 25, 2001 at 3:00 p.m. CALL TO ORDER/ROLL CALL Chairman Kaiser called the meeting to order at 3:05 p.m. Directors Present: Director Absent: Also Present: Edward Kaiser, Alan Archibald, Kerry Miller and David Wigginton. Susan Lamson. John White, Carltas Co. (joined meeting at 3:20 p.m.); Rod Linville and Mark Warren of JC Resorts; Accountant Nancy Sullivan and Board Secretary Pat Drew. ORAL COMMUN ICA TION [3 minutes for each speaker. Maximum 15 minutes for oral communication.] None. AGENDIZED BUSINESS ITEMS 1. Approve Minutes of Special Meeting of December 14, 2000. Director Miller moved approval of the December 14, 2000 Minutes, seconded by Director Kaiser. Approved 4-0-1 (Lamson absent) 2. Information item: Certification of Annual Report for ERGA Revenue Bonds, 1996 Series A. (Nancy Sullivan) Ms. Sullivan advised that the Certification of the Annual Report was an informational item. There were no questions. 3. Review Summary of December 2000 Financial Statement and Summary of Capital Reserve and Expenditures. (Rod Linville/John McNair) 1 . . . Mr. Linville reviewed the December 2000 financial statement. Total revenue was $331,936 compared to a budgeted amount of $288,610 or 115% of budget; expenditures were $218,453 compared to a budgeted amount of $208,786 or 105% of budget. Net income was $111,198 compared to budgeted amount of $77,540 or 143 % of budget. Total rounds were 5,083 compared to budgeted 4,900 or 104% of budget. Year to date rounds are 36,281 or 102 % of budget. 4. Continue Discussion of Rate Issue. (Rod Linville) Chairman Kaiser recommended that the issue be continued to the next meeting when John McNair and Chris Calkins are present. 5. Approve Proposed 2' Drainage Easement along Holes 2, 3 & 4. (Alan Archibald) Director Archibald moved that the Board authorize Kerry Miller to sign the revised easement document, seconded by Director Kaiser. Approved 4-0-1 (Lamson absent) John White joined the meeting at 3:20 p.m. 6. Approve Easement for Encinitas Ranch/New Alignment of Paseo De Las Flores/ERGA (Lot 53) (Alan Archibald) Director Archibald moved that the road easement be approved and authorize Kerry Miller to sign, seconded by Director Kaiser. Approved 4-0-1 (Lamson) 7. Fountain in Pond at Hole 8 (Mark Warren) Chairman Kaiser asked what impact a pond would have on the energy use. Although there would be a timer on the pond which would allow for it to be shut off, and it would not affect the aeration of the pond because there is a secondary system, it was agreed that now is not the right time to proceed with this project. Mark Warren was requested to put it on the capital expenditures for 2001-2002. 8. Status of Requirement for a Landscaping Plan for Hole 14 and Slope Area (Mark Warren/Phil Cotton) Mark Warren advised that he has put together a plan and submitted it to a City representative to take to the Planning Commission. The project on Hole 14 is now completed. The cost was $93,831, less the $35,000 from Cornerstone, for a total of $58,831 which was a little higher than the budgeted amount. 9. Incidents and Accidents. (Rod Linville) Nothing to report. 2 10. . . . Capital Improvement Issues/Discussion (Wish List): (a) Restrooms; Preliminary Design/Sewer Line for Restrooms at the south end of the golf course. Club House Other (b) {c) Chairman Kaiser reported that John McNair and Mark Warren had brought to his attention a I ist of various capital expenditure items that had been approved by the Board during the year. This included $106,601 worth of items that matched the amount at the beginning of the year from the capital expense total of 2.5% of budgeted gross revenue. Director Wigginton said that he understands that the 2.5% was for capital replacement not for buying new things. Director Archibald pointed out that the capital reserve account, as prescribed in the financing documents, reads, "ERGA shall be the sole authorized user of capital reserve funds and it shall be used to pay for the capital expenditures identified in the approved annual business plan. ERGA shall not withdraw funds from the capital reserve account for any other purpose and shall not co-mingle the capital reserve funds with any other accounts of ERGA or the City. Provided, however, ERGA may withdraw funds from the capital reserve account on a temporary basis to cover deficiencies in the operating expenses." So, his understanding is that these funds are for capital improvements. Chairman Kaiser said that his understanding of capital improvements would be new purchases or replacements. Accountant Nancy Sullivan agreed that it would be replacements and equipment. She said that the agreement states anything over $1000 is capitalized. Mark Warren advised that except for the 2 Cool Covers for the Equipment storage ($8,000 - which may increase to $10,500) in progress, the only item that is in the process of being acted upon is the central irrigation system ($3,000) that was ordered in December. Ms. Sullivan advised that $6000-$9000 is added to the capital reserve account each month. E.g. $8,082.78 was added for the month of December 2000. Consultant fees for the Quail Gardens bridge is also being charged as a capital ization cost for the bridge. Chairman Kaiser advised that per Mr. Warren's original enquiry, the bottom line is that ERGA has $128,017 less the $8000 being spent on cool covers, plus about $8000 per month so at the end of the fiscal year should have about $160,000. $100,000 of that amount must be reserved for the bridge. Therefore, it is necessary for the Board to make adjustments to the 2000/2001 capital expenditure budget for the anticipated $60,000 left at the end of the fiscal year (June). He asked Mr. Warren to come back to the next meeting with a revised list for this year and to carryover the balance of the list to 2001-2002. Chairman Kaiser asked the Board if they would approve a policy that stipulates that the Board approves the budget at the beginning of the year but in order to spend it the Board must approve each item before it is acted upon. In this way the Board can keep a better control of the expenditures. Director Miller said he was not comfortable with this since it appeared to him that the Board is attempting to micro-manage. He suggested that a better way would be to look at it as a mid-year budget review at the next meeting. In the future, at the start of the next fiscal year the 3 . 11. . 12. . Board needs to be conscious of the possibility of overspending so that when items like the bridge or the rest rooms come to the board for discussion there would be some financial disclosure as to cost and impact on capital expenditures. Chairman Kaiser agreed that this would be a good procedure to follow. Mr. Warren reminded the Board that they have already approved some additional expenses: $15,000 for hydro-seeding the slopes and $10,000 to reinstall irrigation at holes 2 and 4 for a total of $25,000. He can hold off on this until July if the Board so wishes. It was agreed that there should be an item on the next agenda to cover a mid-year review of the 2000-2001 capital expenditure budget. Potential Course Enhancements. Director Archibald said his issue might be a course correction rather than an enhancement. He had received a report that when they graded the school district site which is west of the south pond, there was water coming through the slope on the school site. They tested it and tested the water in the pond and it appeared to be the same water. He believes that the pond was built about 1954 and no leaks have been reported since that time. According to the Corps of Engineers the pond had six feet of clay linin.g. Director Arc~ibald ~'1~!d. h~:( thinks that what might have. h.appened is that a '?J/b ¡Of rodent, either ground squirrel or"g~, may have dug through the lining and created a ')'9 leak. He believes it should be investigated but is not sure whether it is an ERGA issue \ I or not. The lake is ERGA property. The water belongs to the Eckes. Mr. Warren said he believes the leak is at the surface. John White advised that there was significant irrigation on the top mesa before it was graded so there could be leftover water. Mr. Archibald said they also had springs coming out of the slopes on hole #2 between 2 and 5. It may be just ground water following the sandstone until it perks up. Discussion/Direction Concerning Course Operations, Conditions Needing Change. Mr. Linville reported that: a) They need to start looking at what can be done with the parking lot lights because trucks and cars keep bumping into them and breaking the lights. He keeps getting complaints from first time golfers about the lack of signs. They don't have any monuments yet. b) Director Archibald advised that he has talked to the Planning Department. They have not made the signs or monuments for the whole project a very high priority. Probably won't go to the Planning Commission before March. Director Archibald said that relative to the parking lot lights, the foundations that were put in were for overhead lights. However, because certain citizens did not want the parking lots lit up at night, they went to bollards. They are low-level lighting. 4 . . . iJi,~~ £r~ Patricia Drew, Board Secretary 13. 14. 15. However, maybe the whole issue should be revisited. It would be very expensive to have overhead I ights. Mark Warren advised that they had obtai ned a quotation for nice looking generic--type low lighting, no-flood lights (similar to street lighting) and utilizing the monuments already installed, for $46,000. Director Wigginton said they had experienced the same thing in the City's ballparks. They have the tall lights. The cars are going to hit them whether they are tall overheads or low. The solution is similar to what has been done at the Ralph's shopping center parking lot. About 3-3 Yz feet up they have surrounded their parking lot lights with brown concrete and cobble fascia. So, if a car hit the bollard they wouldn't hit the lighting. Chairman Kaiser asked Mark Warren to work with Director Wigginton to come up with some suggestions and bring back to the Board for consideration. Since this is a potential safety issue it was agreed that it should take priority. Directors and/or Manager Reports Chairman Kaiser said that according to John Nabors the bridge goes before the Planning Commission on February 22 and he will be able to report back at the March meeting. [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.] Next Meeting - Thursday, March 1, 2001 at 3:00 p.m. March 1 It meeting is the rescheduled February meeting. Discussion of date for March meeting (Directors Miller, Archibald and Wigginton have conflict with March 22.) No meeting in March unless a need arises. 16. Adjournment. Chairman Kaiser adjourned the meeting at 4:06 p.m. Respectfully submitted, I . '. . --:-"",.../' Edward Kaiser, Chairman 5