2005-03-22
CITY OFENCINITAS
ENCINITAS RANCH GOLF AUTHORITY
MINUTES OF REGULAR MEETING
TUESDAY. .MARCH 22, 2005 at4:00 p.m.
Lilac Room, Civic Center
505 South Vulcan Avenue
CALL TO ORDER/ROLL CALL
Chairman Kaiser called the meeting to order at 4: 1 0 p.m.
DIRECTORS PRESENT: Ed Kaiser, Kerry Miller, Chris Hazeltine and Peter Cota-Robles.
DIRECTOR ABSENT: Cindy Jacob
ALSO PRESENT: Chris Calkins, Carltas Co.; John McNair, Rod Linville, Kent Graff and
Duane Conta, JC Resorts; Staff Nancy Sullivan and Pat Drew, Board
Secretary.
ORAL COMMUNICATION [3 minutes for each speaker. Maximum 15 minutes for
oral communication.]
None.
AGENDIZED BUSINESS ITEMS
1. Approve Minutes of Regular Meeting of February 22,2005.
Director Cota-Robles moved approval of the February 22, 2005 minutes, seconded by
Director Hazeltine. Approved 4-0-1 (Jacob)
2. Review Summary of Revenues and ExpenditureslFinancial Statement/update on Capital
Reserves for February, 2005 (Rod Linville/John McNair)
Mr. Linville reviewed the February Financial Statement.
Revenues for the month were $259,266 compared to a budget of $362,272 or 72% of
budget; Expenditures were $187,304 compared to a budget of $246,682 or 76% of budget;
Net income was $69,479 (before cell tower income) compared to a budget of $114,556 or
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61 % of budget; Total Rounds were 4,027 compared to a budget of 5,493 or 73% of
budget. Mr. Linville noted that there were nine days of rain in February which eliminated
play.
Year to date Net Income was $802,083 (before cell tower income) compared to a budget of
$985,318 or 81% of budget; Including cell tower revenue Net income was $1,251,017
compared to a budget of $1,025,318 or 122% of budget; Total Rounds were 42,341
compared to a budget of 46,216 or 92% of budget.
Mr. McNair reported that Capital Reserves at February 28 were $45,343.61. Projected
Capital Reserve at June 30, 2005 is $96,364 with a Total Capital Expense vs. Account
Variance of $41,364.00. He said that he has discussed with Kent Graff and Rod Linville
about the fact that the one thing he wants them to work on before the end of the year is
putting together the nursery putting greens. They have just completed one near the
maintenance facility and then will build a second larger green next to the teaching center on
the top ofthe hill.
Clubhouse Expense to-date is $38,944.13 with reserves at February 28 of$394,689.68.
3. Action Regarding Earmarking Cell Tower Funds for Capital Improvements.
(Nancy Sullivan)
Ms. Sullivan reviewed her report included in the agenda package. She said page two
showed what would happen to the bottom line if the cell tower revenue was not marked as
capital for the clubhouse and if it was reserved as capital. If the Board decides to ear-mark
the cell tower revenue for the clubhouse the second column shows that we could still go
down and pay some of the five year look back and also could replenish some of the
operating reserve fund. She reminded the Board that when the bridge was built they used
one month's revenue for the bridge. So that if the Board wanted to replace that, in theory,
this year might be a good time to do that because both CFD and Golf Course bonds have
been refinanced and we are saving money on both of those. The problem this year, though,
is that we are not meeting budget because of rain. Page three outlines the five year look
back, and what is still outstanding. The CFD Look Back balance at June 30, 2004 is
$921,"161.63.
Mr. Calkins said he would like to make an observation. The concerns that Carltas has is
that number one, in the period of time during which revenues will be available to repay the
sales tax advance that there is enough to payoff the remaining balance. It looks as if the
Board adopts what is being proposed that (setting aside as capital) the look back will be
paid back. The real issue they are looking at is looking ahead as to whether there will be
enough to pay off the sales tax of $750,000 by 2012 or 2013. There are two years in which
100% of surplus revenues go to pay that and then following that, next year and the year after
that, the City gets to split 50-50 the surplus revenue. If the Board continues to budget as it
has, sometime in the next six years the remaining $750,000 sales tax should be retired. He
said that looking at it from that perspective he doesn't believe that they would object if the
Board chose to change its policy and adopt the budgeting that would substantially reduce
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the projected revenues and decided to arbitrarily force these or something else, they might
demand that the Board revisit the issue. On that basis they won't object at this time to the
characterization of the cell tower revenues as capital. With that one caveat they wouldn't
obj ect to it and would understand why the Board would characterize the revenues as capital.
He suggested that someone may want to look into whether there is a tax issue. Director
Miller thanked Mr. Calkins and said he agreed with him and would like to make a motion.
Director Miller moved that the Board ear mark the cell tower income for capital
improvement, seconded by Director Cota-Robles. Approved 4-0-1 (Jacob)
Under discussion, Director Cota-Robles said he wanted to comment that part ofthe intent of
putting the funds aside was to allow the move forward with the expansion of the clubhouse
and part of the rationale for that is to protect the long term integrity of the operations at the
golf course and to ensure that everything at the golf course is competitive which should also
serve to work towards a long term revenue stream.
Chairman Kaiser moved to do a one time extraordinary increase for reserves to set
aside $240,000 to operating reserves, seconded by Director Miller. Approved 4-0-1
(Jacob).
4.
Report on Course Enhancements
(Kent Graff/Suhcommittee)
Kent Graff reported that they got concrete poured between the cart parking area at the
driving range and the actual hitting area, which for the longest time was rather a muddy
mess and was exacerbated by the rains this year. In addition, as mentioned they did
construct a small nursery outside the maintenance facility.
Mr. Calkins asked if JC Resorts was looking into using artificial turf. He said he had played
at La Jolla where they have the artificial turf and it is great to play on. Mr. McNair said yes,
they are looking into artificial turf. One of the problems is that apart. from it being very
costly, it hasn't been around very long so they don't know how it wears over time.
5.
Update on Status of Clubhouse Improvements.
(John McNair)
Mr. McNair said the only thing he had to report was that Bre' Ann Fox (Cindy Jacob's
contact and recommendation) would not go for the "not to exceed $6000." Madeline
Young agreed to go with "not to exceed $6000.00." John Nabors is taking the design to the
Planning Commission on April 21 st. Chairman Kaiser said he would plan to attend the
meeting.
6.
Update on Cell Tower Discussions.
(John McNair)
Mr. McNair advised that Cingular wants to put in a second cell tower. He said he is trying
to see ifhe can get a third carrier in the water tower. He is working with Nextel to see ifhe
can put their tower in the loft of the barn. He doesn't believe their frequency would permit
them to go in the water tower.
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The Board members were unanimous in their approval of the new cart barn loft design. Mr.
McNair said he will move ahead to work with Nextel on locating their cell tower in the loft.
7.
Report on Condition of Windmill and Proposed Improvements.
(Kent Graff)
Mr. Graff said he had met with the rehabber. He advised that the easiest and most effective
thing to do was to take the existing posts that support the water tank and knock off about
eighteen inches and then concrete up. He does have some older timbers to replace the posts
that have dry rot etc., and on the tank itself there are some that are falling apart. The only
thing they looked at was the base the tank sits on. Some of those timbers are decomposing
on the ends but it kind of gives it "character." We might want to leave those. Everything
structural-wise would be easy to take care of. The estimate is around $3000 to do the
recommendations. Chairman Kaiser asked Mr. McNair to put the repair expense on the
capital expense list.
Ms. Sullivan asked ifthe windmill was originally on the farm. Mr. Calkins replied that yes,
it was originally located along with the water tower and a group of farm equipment in a
triangle at the end ofthe row of trees on the farm in the Green Valley run by another family,
not the Eckes. It is probably about ninety years old.
8.
Incidents and Accidents.
(Rod Linville)
Mr. Linville reported that he had another physical confrontation on the golf course at hole
#16, this time between a group of older gentlemen in their 60's and 70's and a group of
younger gentlemen in their late 50's. He said he has not taken any action against either
party.
He also had a call from the City's Risk Manager, Jace Schwarm, saying she had been
contacted by a lawyer who said his client had been hurt on the course when a sprinkler came
on unexpectedly. The water hit him in the ear. JC Resorts' Risk Manager at Rancho
Bernardo will handle and Mr. Linville will advise the Board of the outcome.
9. 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.]
Mr. Calkins said he would like to outline an issue which the Board may wish to put on the
agenda for a future meeting. He said that as the Board knows, he has a large piece of
sculpture (the Big Red Dot) in his garden. He believes this is one of the things that makes
the course unique and people do comment on that and like the idea that there is something
sort of different. The sculptor is an Italian who has a very strong international reputation.
He likes California and comes here frequently and has made several installations mostly at
public entities or museums. In the course of recent discussions with him a couple of things
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occurred. Mr. Calkins said he had been thinking about that with the expansion of the
clubhouse it would be nice to do something that was unique. The artist has two works that
he did on commission, one for a Santa Monica museum and one for a museum in Northern
California. They are stored down here after being out on public display. They are
geometric objects. Mr. Calkins asked him if he would consider putting them on loan for a
couple of years - he (Mr. Calkins) likes the idea very much. He said he would be willing to
make a contribution to underwrite the installation, see ifhe could negotiate the loan and pay
the cost of maintenance for a two year period. The artist would work with the Golf Course
to find a suitable location that he felt would work well with the course. The installation
would probably be a concrete pad with some sort of structural member that goes with it.
He said that he thought it would be unique to get in ahead of Carlsbad which has a budget
for art on their new golf course. The two pieces he has have been designed for public art so
they have surfac~s that can be easily maintained and graffiti is not a big issue. The issues
for the golf course would be to find a location that wouldn't interfere with play and possible
liability. They wouldn't be put where someone was going to walk into them so liability is a
minor consideration, and maintenance is essentially an easy process since they are designed
to be outside.
Director Miller said this maybe the first opportunity for a new arts policy to be exercised by
the City Council. He knows the Council is very interested to get a policy in place so he felt
that possibly before the end of June the Council will have adopted a public arts policy. He
said he felt it would be better to wait until that time as opposed to ERGA taking any action.
It may establish a process by which these kinds of offers can be reviewed to determine their
acceptability and implemented.
10. Next Meeting - Tuesday, April 26, 2005 at 4:00 p.m.
11. Adjournment
Chairman Kaiser adjourned the meeting at 5:20 p.m.
RaespectfullY su~tted,
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Patricia Drew, Board Secretary
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Edward O. Kaiser, Chairman ofthe Board
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