2006-11-14
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CITY OF ENCINITAS
ENCINITAS RANCH GOLF AUTHORITY
MINUTES OF SPECIAL MEETING
Lilac Room, Civic Center
505 South Vulcan Avenue
TUESDAY. November 14, 2006 at 4:00 p.m.
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CALL TO ORDER/ROLL CALL
Chairman Kaiser called the meeting to order at 4:07 p.m.
DIRECTORS PRESENT:
Edward Kaiser, Cindy Jacob, Peter Cota-Robles, Chris Hazeltine and
Phil Cotton, being all of the Directors.
ALSO PRESENT:
John McNair, Rod Linville, Kent Graff and Rob Oosterhuis, JC
Resorts; Chris Calkins, Carltas Co.; Nancy Sullivan, staff member,
and Board Secretary Pat Drew.
ORAL COMMUNICATION [3 minutes for each speaker. Maximum 15 minutes for
oral communication.]
None.
AGENDIZED BUSINESS ITEMS
1. Approve Minutes of Regular Meeting of September 26, 2006.
Director Cota-Robles moved approval of the September 26 meeting minutes, seconded by
Director Hazeltine. Approved 3-2-0 (Jacob and Cotton)
2. Review Summary of Revenues and ExpenditureslFinancial Statement/update on Capital
Reserves for September and October (if available) 2006 (Rod Linville/John McNair)
Mr. Linville reviewed the financial statements for September and October.
Revenues for the month of September were $436,083 compared to a budget of $385,249 or
113% of budget; Expenditures were $298,716 compared to a budget of$3l8,987 or 94% of
budget; Net Income was $138,267 compared to a budget of $66,282 or 208% of budget;
rounds for the month were 6,161 compared to a budget of 5,391 or 114% of budget.
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Year to date Net Income was $545,714 compared to a budget of $488,888 or 112% of
budget; Total Rounds were 21,357 compared to a budget of20,848 or 102% of budget.
Revenues for the month of October were $376,359 compared to a budget of $297,425 or
127% of budget; Expenditures were $268,189 compared to a budget of $279,313 or 96% of
budget; Net Income was $101,195 compared to a budget of $18,112 or 559% of budget;
Total rounds were 5,255 compared to a budget of 4,154 or 127% of budget.
Year to Date Net Income was $646,907 compared to a budget of $507,000 or 128% of
budget; Total Rounds were 26,612 compared to a budget of25,002 or 106% of budget.
Mr. Linville remarked that not over seeding is what made so much difference for the month
of October.
Mr. McNair reviewed the summary of capital reserve and expenditures for the month of
September 2006. Capital reserves at September 30 were $138,381.45; Clubhouse
expansion reserves were $277,534.39 after expenses for the month of $32,688.64; Long
term capital reserves balance at September 30 were $107,119.60; Total all reserves were
$523,035.44.
October 2006 capital reserve and expenditures summary was not available for review.
However, basically nothing has changed since September.
Chairman Kaiser asked about payments to Madeline Young and Joe Ramos and was
advised that they have been paid in total.
Mr. McNair handed out a schedule showing club house expansion Capital Expenditures -
Sources and Uses through October 16, 2006. Expenditures to that date were $172,519.88.
Total Capital Sources are $1,410,062.44, less the remaining balance of $1,406,848.02 for a
projected Capital Surplus of $3,214.32. He pointed out that since the last meeting he had
moved the Contingency from 10% to 5%.
Mr. Graff explained the happenings of the last two months. He said that because the project
had been classified as a public works project the bid process had to go back out. Directors
Cota-Robles and Hazeltine had pointed out that the requirements under the agreement as an
Encinitas Ranch Authority fell under the Public Contract Code which necessitated that they
go back out to bid. Under the stipulations of the Code it goes under a prevailing wage
contract which therefore affects the bottom line. The cost to do the construction with
prevailing wages increased the budget by roughly $200,000. So, in order to make up for
some of those costs Mr. McNair has come up with some creative ways to offset the costs.
Mr. McNair explained how he is coming up with the additional $200,000 by getting a lease
on the club house from the same company that he has leased the maintenance equipment
from for the past six or seven years. He will get $150,000 from them. They will be able to
lease the money to ERGA based on the club house.
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Mr. Calkins said that it could be accounted for as a lease vs. a loan. Since ERGA is in a
position where borrowing is a problem the lease structure allows us to use operating
revenues. He said that if he understands it right we should have enough operating revenues
to allow for it. The consequence is that the money would come to the City as sales tax
reimbursement, basically coming out of Carltas potential. But he agrees that we need to get
the club house and they, Carltas, don't object to it.
Chairman Kaiser asked if there would be any penalties for prepaying the leases and was
assured there would not be penalties.
Mr. Graff said that on completion of the grading then he will go back to the Building
Department for the building permit after the rough grading is completed. At that point he
can go to the Building Department to see if we can get occupancy without the trellis which
is being considered for future installation to save $46,000 in landscape/trellis costs.
In addition, Mr. McNair said they would hold off on the Golf Shop fixtures to save
$70,000. He suggests keeping the fixtures that they already have and hold off on replacing
the carpeting in the Pro Shop. They could move the Food & Beverage wall back three feet
to allow for space for the current fixtures. He said they could definitely use the additional
space in the Pro Shop. He said he can bring the plans to the next meeting.
Mr. McNair also said that if the City does not give them the OK on the trellis, then Mr.
Graff has a Plan B that he buy the wood now for the trellis out of the Operating Account
which is for any improvements on the golf course, paint and prepare for installation and put
in storage so as to have it ready for the contractor with a change order if necessary.
Mr. McNair said that the projected capital Surplus/Shortfall needs to be in the Surplus
column if the Board is willing do another lease issued to the project in the amount of
approximately $160,000.
Director Hazeltine moved approval of Lease #2 in the amount of $160,000, seconded
by Director Jacob. Approved 5-0
Mr. Calkins left the meeting at 4:40 p.m.
3.
Encinitas Ranch Golf Course Marketing Plan.
(John McNair)
Mr. McNair reviewed his proposed marketing plan. He said there were four different
categories in the Plan: Advertising, Direct Mail, Printing and Miscellaneous (photography,
public relations and website). He said this is just the first draft but he wants to be ahead of
the curve given there's a $60 million club house and golf course coming on line just up the
road (Carlsbad). He described the proposed action for the various categories.
Mr. Linville said he had just got a letter from Golf Digest saying the course had been given
a 4-Star rating. That comes in from customers who respond to the Golf Digest's survey on
their favorite courses. That's the course's first 4-Star rating.
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4.
Report on Course Enhancements
(Kent Graff)
Mr. Graff said that first he would like to talk in terms of over seeding and not over seeding.
Chairman Kaiser first brought up the subject after he played Shadowridge golf course and
he said he had also had the opportunity of playing that golf course. They haven't been over
seeding for six years and the value that they have found in that process has been significant.
This year, being our first year, we are going to feel a little growing pains simply because of
1) our fairways are going to be in very good shape during the winter time, 2) they have
eliminated the cool season grasses by using a herbicide, 3) they didn't have much turf loss
other than a little bit where the cool season grasses were very dominate in that area, and 4)
the Bermuda grass is having continuous growth with the ideal weather we have been
having. The pain part is that the rough, over a period of time. has unfortunately deteriorated
after being abated with the ongoing rye grass over seeding process because the rye grass
does well enough to compete against the Bermuda, so our Achilles heel is that we suffer
right now in the rough. He said they are addressing that problem with over seeding in those
areas with rye grass. The downside is that they are not getting enough germination with the
high salt content in those areas, no rainfall and the irrigation water does not lend itself to be
the best for growing conditions. He said he feels comfortable that with some rain they will
get germination. He said he gets reports from secret shoppers that the greens are good, the
fairways are good, and roughs are a problem. He wanted to thank Chairman Kaiser for
introducing them to the idea a year ago because he feels it is the best thing going forward.
He feels it is going to make a positive impact.
5.
Update on status of Clubhouse improvements.
(John McNair/Kent Graff)
Mr. Graff said that they are breaking ground and Mr. Linville and his staff are moving into
their temporary quarters. He said he had compliments for them for the really great job they
have done with the transition. They are now in the first stage for setting up for the
contractor to move on during the following week. They have salvaged some sod and
removed some trees. They have relocated a number of plants out on the course.
6.
Cell Tower Review
(John McNair)
Mr. McNair reported that nothing much has happened the past month, they are going ahead
but very slowly
7.
Incidents and Accidents.
(Rod Linville)
Mr. Linville said he had nothing major to report. He said they had a tournament hosted by
the San Diego State Alumni as a fundraiser for one of their fraternities where they had some
issues. The coordinator actually stood up and said they would pay for all the damages to the
golf carts and the course.
8. Directors and/or Manager Reports
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/
[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.]
Chairman Kaiser welcomed Director Cotton and said it was good to have him back on the
Board.
Mr. Graff advised that they had promoted a young man who had been on their crew for the
past year and a half to the Assistant Superintendent position. His name is Kevin Larson and
he will be introduced at the meeting in December at the golf course.
9. Next Meeting - Tuesday, December 19,2006 at 3:00 p.m. at the Clubhouse.
It was decided not to have a Christmas party at the Clubhouse this year and to have the
Board meeting in the Lilac Room at City Hall at 3 :00 p.m. on the 19th.
10. Adjournment
Chairman Kaiser adjourned the meeting at 5:04 p.m.
Respectfully submitted,
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Patricia Drew, Board Secretary
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EdWard O. Kaiser, Chairman ofthe Board
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