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1997-10-16 CITY OF ENCINITAS ENCINITAS RANCH GOLF AUTHORITY MINUTES OF REGULAR MEETING THURSDAY, OCTOBER16, 1997 CALL TO ORDER/ROLL CALL Chairman Kaiser called the meeting to order at 3:10 p.m. Directors Present: Edward Kaiser, Lauren Wasserman, Alan Archibald, David Wigginton. Director Absent: Kathy Riggins Also Present: Manager Jim Benson; John White of Carltas Co.; Scott Bentley and John Mason of J.C. Resorts; Pat Drew, Recording Secretary, Leslie Suelter, City Finance Manager. Members of Public: Clementine Hale, B.W. Smith, Clair Waldman, Heather Eaks, Larry Eaks, Art Beardsley, Chris Bartsch, C. Cary Barton, . ) ORAL COMMUNICATION None REGULAR AGENDA 1. Approve Minutes of Special Meeting of October 2,1997. Director Archibald moved that the minutes of the October 2, 1997 be approved as presented; seconded by Director Wasserman. Approved 4-0-1 2. Receive and Acknowledge Donation of $1100 for 40 Torrey Pine Trees from the Y's Men International Club. Discussion of Suitable Plaque and Location. Director Wasserman moved that the Gift be accepted with thanks and a Letter of Appreciation be sent to the V's Mens Club indicating that the Board will be acknowledging the gift at the Dedication Ceremonies. Seconded by Director Archibald. Approved 4-0-1. Secretary directed to respond with a letter for members' signatures, indicating the Board's appreciation and that the Board will be giving consideration to appropriate 1 means of recognizing all future donors, and will consider the display of plaques, etc. in the permanent club house. John White suggested that the Board call upon Director Riggins for her expertise from her experience with donors to the YMCA. Staff and J.C. Resorts requested to make a recommendation on how plaques could be displayed in the current temporary club house and to bring back for consideration a draft policy on recognizing future donors. Taken out of Order: 7. Men's and Ladies' Clubs Mason) (John Art Beardsley, President of the Encinitas Golf Association, asked to speak to the item following presentation by John Mason. John Mason of J.C. Resqrts gave a presentation on their plans for organizing Men's and Ladies' clubs, and requested Board's approval to move ahead. They are recommending that the course be reserved for the Men's Club to play on Wednesdays from 7 am to 10 am, and the Ladies on Tuesdays from 8 am to 10 am. One shot-gun tournament per month for each club; first Wednesday in the month for the Men's Club and first Tuesday for the Ladies' Club. J.C. Resorts will draw up an Agreement of Understanding between the Golf Course and the Clubs and provide written guidelines for conditions of play and organizing the Clubs; J.C. Resorts would like to have final approval of the Clubs' activities. The Clubs would collect their own funds and manage their own affairs. Those funds would pay for the handicap service - SCGA for the men and probably SD County Women's Association forthe women. Requested Board to approve the concept for the clubs. They need to move ahead with public meetings to have people sign up for the Clubs prior to the end of the year in order to avoid having to join two clubs to maintain their handicaps. Would like to have a noticed public meeting at City Hall to sign up members and elect Board members to organize and govern their affairs. Anticipates that members will pay greens fees at the going rate for whatever category the individual player qualifies. Art Beardsley spoke to the proposed plan for the clubs. He felt Wednesday for the Men's Club was good but that tournaments should be scheduled for at least 36 holes for club championships to avoid having to play additional weekends before getting to club finalists. Scott Bentley said this could be remedied by having a two day event. Mr. Beardsley said he objects to the golf course/club being signed up with SCGA rather than SCPLGA (PubLinks) as he has expressed at previous board meetings. He has 106 people ready to sign up; also has a constitution 2 prepared for the Encinitas Golf Association which would just need a name change and it's ready to go. He was reminded that some months ago the ERGA Board made the decision to go with SCGA after listening to presentations by both organizations. Chairman Kaiser said he did not feel it was for the Board to sanction or endorse a Mens or Ladies Club, nor to set rules for the Clubs. J.C. Resorts were hired to run the golf course. All the Board should be doing is to endorse the concept of having a Mens and/or Ladies Club. Director Wasserman moved approval of the concept of having Mens and Ladies Clubs to be Administered by J.C. Resorts, the Course Operator. Seconded by Director Archibald. Approved 4-0-1. Taken out of order. 4. Review and Approve Budget for City Related Support Costs. Manager Benson presented a schedule representing an estimate of costs to be incurred by the City which ERGA has agreed to reimburse. He explained that these are management's best estimates based on experience thus far for the cost of the four month budget and the twelve month budget. They do have an impact on the bottom line which will be discussed later when adding into the spread sheet. By way of explanation, he said the costs to date have been set up in the creation of an entity and costs have been rolled back into the bond issue - city costs that were projected in the bond issue, which is why there has been no need to handle anything prior to March, 1998. Asked the Board to approve. Director Kaiser moved approval of the proposed budget, Director Wasserman seconded. Approved 4-0-1. 3. Approve Logo Design. Scott Bentley advised that as the Board had requested, they had gone back to Ron Muriella of Muriella Graphic Co. for new logo designs, with a request redo the poinsettia flower and tone down the coloring. He passed drawings of two designs explaining the difference in the design and the reason for it. Director Kaiser moved to accept the logo version "A" as presented, seconded by Director Archibald. Approved 4-0-1. 5. Review Revised Projection of Golf Course 10-year Summary and Approve Initial Golf Rate Structure to be Used as of March 1, 1998. Manager Benson reviewed his revised projection for the golf course cost growth impact. At this time the interest on the monthly bond set-aside is not included. Some adjustments need to be done for the August through July set-aside but does 3 not feel these will significantly affect the bottom line as we go out through the years. CFD bond payment schedule needs to be refined to bring in the exact payment amount. The important number to note is the $2.2 million protection requested by the bond purchaser before the moneys would be released. If we were short a few thousand dollars it would behoove ERGA, or Carltas in particular, to make a "donation" in order to get to the $2.2 million. When we get to making the 1999/2000 budget, that is the number we will be looking at in terms of are we meeting the target set (number of rounds). If not, may require that rates be increased a dollar or so to meet the target. In accordance with the Board's action at the last meeting regarding the capital excess of the bonds, an adjustment was made to include this. As indicated, Carltas does not start getting moneys back out of that until FY 2000/2001 where they get $436,000 which drops the revised balance downwards. Therefore, based on what was done on the cost growth on course enhancement, Carltas is carrying just under $1 million for about four years, at which time it gets reduced by 50% and disappears in 2002/2003. This is all in the pro formas at 70,000 rounds. Also, the provisions in the pro formas say that when we end up with deficiencies and when the money is insufficient to make a payment to the CFD, they can roll over for five years. Based on some of our revisions, the five year roll over basically carries Carltas out to not recovering about $600,000 in CFD payments. However, the spread sheet indicates that by the year 2010 we are into the black and generating $343,000. This is important from the City's perspective because the following year we start sharing 50/50 with Carltas, rather than the $343,000 going to Car/tas. Therefore, from the City's perspective we have about a year's worth of cushion on the golf course meeting its obligations and generating revenue back into the City as it was supposed to do. From Carltas' perspective, this is a little bit later than what they were anticipating getting some money and having it covering the CFD. However, this is not too far off the original pro formas. The rates that are in place and presented in draft format at the last meeting, will have the golf course performing financially providing we hit 56,000 rounds in 1998/99. This is a conservative number in terms of rounds, and the golf course will be performing the way it was intended when we sold the $11 million worth of bonds. Continuing the subject of rate structure, a question was raised as to whether City employees who are not City residents would get residents' rates. The Board agreed they would not. In response to a question from Chairman Kaiser, Scott Bentley reviewed the operation and benefits of the JCR Club. The club has about 1800 members who have privileges at all the J.C. Resorts golf courses. Expect the membership to grow to over 2000 next year. It costs $259 to join for a one year term; it entitles members to discounts, advance tee times, 10% discount on g.olf shop merchandise. They get five free rounds of golf; one good at Rancho Bernardo and the other four good at any golf course. They turn in the discount coupon and 4 the course gets reimbursed $45 for each "free" round. The discount coupons are good for play Monday through Thursday and include a cart. The discount is equivalent to approximately 20%; it varies according to the course played. . This next year they will be offered a weekend option in their coupon book for $299. Courses would be reimbursed $55 for that round of golf. Mr. Bentley said that since the last meeting they had adjusted the pro forma to show weekend rates at $49, rather than $48 in the earlier pro forma. Friday rates are also included in the revised pro forma; carts are mandatory for weekend mornings before the late rate goes into effect. No mandatory cart usage during the week. The $5 discount for residents and JCR Club members on week days and weekends during prime time is included in the current pro forma. No discounts on other discounts (e.g. late rate). Board members agreed to defer further discussion and setting of the rate structure until the full Board is present. To be brought back to the November meeting. In the meantime, JC Resorts was authorized to go ahead with their JCR Club brochures and material showing rates as tentative. 6. Approve Form of Monument and Plaque Signs. (John Mason) In the absence of Director Riggins, John Mason gave presentation on the monuments and plaque signs that he had developed and discussed with Director Riggins. Board agreed with recommendation. Director Wigginton moved approval of the pictured rock monument as presented; Director Wasserman seconded. Approved 4-0-1. John White left at this point. 8. Approve Policies: a) b) c) d) Cash Controls Inventory Controls Waiver of Green Fees Use of Course by Groups and Tournaments Director Wigginton presented the proposed policies and procedures. Board agreed to defer approval until full Board is present. To be brought back to the November meeting. 9. Potential Course Enhancements: Report from Inaugural Events Committee. Board reviewed the updated schedule that Director Riggins had delivered for discussion. 5 An agenda item was requested for the next Board meeting to discuss/consider an open day for residents to walk the course. John Mason requested an item for the next agenda to discuss an idea for a promotional tournament event for John Mason and Scott Bentley to play the Buick Open champions. 10. Directors and/or Manager Reports. Director Archibald reported that the pressure that had been put on Environmental Golf earlier had paid off. The course is looking great. A blind spot at hole16 is to be worked on. 11. Next Meeting - Thursday, November 20, 1997 at 3:00 p.m. 12. Adjournment. Chairman Kaiser adjourned the meeting at 4:40 p.m. Respectfully submitted, ~;~':Dr~ Patricia Drew Recording Secretary ~~~~ ~dward aiser Board Chairman 6