2007-05-25
CITY OF ENCINITAS
ENCINIT AS RANCII GOLF AUTHORITY
l\llNUTES OF SPECIAL lVlEETING
Lilac Room, Civic Center
505 South Vulcan Avenue
FRIDAY, MAY 25, 2007 at 1 :00 P.M.
CALL TO ORDER/ROLL CALL
Chairman Kaiser called the meeting to order at 1 :07 p.m.
PRESENT:
Edward Kaiser, Cindy Jacob, Phil Cotton, Chris Hazeltine, Peter
Cota-Robles being 011 of the Directors.
ALSO PRESENT:
John McNair, Rod Linville, JC Resorts; Bill Dean, Nancy Sullivan
and Board Secretary Pat Drew.
ORAL COlVll\lUNICA 1'1 ON [3 minutes for each speaker. Maximum 15 minutts for
oral communication.]
None.
AGENDIZED BUSINESS ITEMS
1.
Approval of Budget for FlY 20007-2008.
(John McNair, Rod Linville)
Chairman Kaiser said that since everyone hod received a copy of the
budget for review he was opening up the meeting for questions.
The Chairman asked Mr. McNair to explain how the snack bar works. He
explained that there is a leasing section agreement which coincides with
the management agreement and it is based on a percentage of gross. It's
a very simple concept - 20% of gross revenues goes to ERGA. Additional
labor and expenses will not affect ERGA - costs will be covered by JC
Resorts.
Mr. Dean said that he noted that the same amount of revenue is being
projected for the coming year and asked if that was a conservative
approach. Mr. McNair said that actually they hadn't done the budget yet
so just took last year's numbers. He expects the numbers should go uo.
Director Cotton noted that City costs were increased $16,000. He was
advised that it was done in response to a Finance Department study. In the
past during the period when ERGA was refinancing the bonds, several
members of the Finance Department contributed their time but did not
charge ERGA. This is to allow for such costs in the future. Director Cotton
said they will go back and look at that issue.
Mr. Dean asked about the increase in operational improvements from
$3000 to $24,000. Mr. McNair responded that that was because this past
year they cut back on improvements because of the construction of the
clubhouse, but $24,000 has always been in the budget for capital
improvements. However, we have had major capital improvements such
as the bridge over Quail Gardens for about $322,000, two course restrooms
were installed for a cost of approximately $200,000, improved all the cart
paths two years ago with turnouts etc., and now the clubhouse. He sClid
that at other golf courses they have capitalized maintenance equipment
but traditionally 95% of the time at Encinitas Ranch they have leased the
equipment.
Director Jacob said she had a question on the lease being charged in
June. Mr. McNair explained that it was a lease for the clubhouse that was
created in the last year. A lease was taken out for $371,000: $130,000 of
that was paid at the end of last year and there are four more payments
due of approximately $60,000 which are paid in June at the end of the
fiscal year.
Ms. Sullivan explained that we need to have enough cash in the excess
cash account at year end to pay not only the golf bonds to September, but
have enough money to pay the CFD bonds for next year, too. Mr. McNair
said that in the budget $160,000 takes both of those into account.
Chairman Kaiser said that the agreement with Carltos is that we pay back
the loan from the operating account by $10,000 per month. It is not legally
a debt service item. Ms. Sullivan also explained the payments for the sales
tax loan.
Director Jacob asked about a line item of $6000 a month for security. Mr.
Linville explained that the security company they are currently using is
Ultimate Security and they are paying them $16.50 an hour. This will vary
from month to month according to the season and daylight hours. Lost
year they moved security from golf operotions to administration in general
2
in the budget. Mr. McNair said they have had more nightly incidents here
for some reason which has surprised him given the affluent area in which
the golf course is located.
Director Cotton moved to approve the budget as presented, seconded by
Director Hazeltine. Approved 5-0.
2.
Approve Bonus Compensation for Key Individuals.
(Chaim1an Kaiser)
Chairman Kaiser moved that the Board accept the proposed bonus
compensation to golf course staff for specific work related to the clubhouse
expansion, seconded by Director Cotton. Approved 5-0.
3. Next Meeting - Tuesday, June 26,2007 at 3:00 p.m. at the Golf Clubhouse, followed by the
grand opening and ribbon cutting.
4. Adjounm1ent
Chairman Kaiser adjourned the meeting at 1 :45 p.m.
Respectfully submitted,
S~rA ~j}~vif
Patricia Drew
Board Secretary
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Edward O. Kaiser
Chairman of the Board
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