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1998-06-11 CITY OF ENCINITAS ENCINITA.5 RANCH ENCINITAS RANCH COLF AUTHORITY MINUTES of SPECIAL MEETING THURSDA V, JUNE 11, 1998 at 3:00 p.m. CALL TO ORDER/ROLL CALL Chairman Kaiser called the meeting to order at 3:02 p.m. Directors Present: Ed Kaiser, Kathy Riggins, Alan Archibald, Lauren Wasserman, David Wigginton. Directors Absent: None Also Present: Chris Calkins of Carltas Co.; Scott Bentley, Rob Powell and John Mason J.e. Resorts; General Counsel Roger Krauel, Manager Jim Benson, Secretary Pat Drew. Public Present: Tom McShane and Jim Hagen of the Encinitas Ranch Men's Golf Club. ORAL COMMUNICATION Jim Hagen thanked the Board for the Men's Golf Tournament. ACENDIZED BUSINESS ITEMS 1. Approve Minutes of Regular Meeting of May 21,1998. Director Archibald moved approval of the May 21 minutes, seconded by Director Kaiser. Approved 4-0-1 (Director Riggins abstained since she was not at the 5/21 meeting.) 2. Approve July '98/June '99 Operating Budget. Scott Bentley reviewed the changes to the budget made since the May 21st meeting. Director Archibald indicated that a line item of $2800 should be added for Zone H Encinitas Ranch portion of the Lighting and Landscape Maintenance District (LLMD) Proposed Assessment for 98/99. Manager Benson explained that another line item that should be added is for the charges for staff support of Contract Accountant Nancy Sullivan and City Parks Superintendent Phil Cotton. These are not items that J.e. Resorts have any control over but the Board needs to approve as part of the budget. Line item of $19,000 to be added. With these changes the budget will be down $144,000 cash flow after debt. This is based on 67,000 rounds for the year. The driving range will probably not be open until late July which will reduce the revenue by about $17,000. Director Riggins asked the Manager if the surplus goes back against the debt. His response was that it goes into a holding account until year 2000 based on the bond agreement. It can then be released and will then go back to pay for Community Facility District payments, cost growth on the golf course which will go back to Carltas. Any monies left after that will be used to repay the debt on the sales tax loan to Carltas related to the Commercial Center. The City is currently working on a second debt financing for the Community Facility District. Carltas is to make a presentation to City Council at its next meeting about doing some subordinated debt and capping the total amount of money that Carltas will be reimbursed. They will absorb something like $5 million of cost growth on the Community Facility District beyond what they are going to be reimbursed. Part of the cost growth is in the CFD portion that was to be paid by the golf course. The Leucadia Boulevard cut-down through Green Valley was much more expensive than originally budgeted. This will be capped as a part of the financing, so that will be one of the obligations of the golf course. While there is surplus available it will be used for a number of things for quite some time. Director Wasserman recommended that a line item of $3000 for increased legal expenses be added to the budget. Any significant projects or future litigation would come back to the board for additional appropriation. Director Archibald moved approval of the budget with the changes discussed, seconded by Director Wasserman. Approved 5-0 3. Approve Proposed Plan for an Encinitas Ranch Golf Course Junior Golf Program. (Scott Bentley/John Mason) Golf Professional Rob Powell advised that he and Scott Bentley and John Mason had discussed a junior golf program for the course using monies that had been earmarked from the inaugural golf tournament ($9300). They propose a scholarship program and suggest presenting two $750 scholarships per year, over next two years, to two deserving junior members of the Encinitas Ranch Junior Golf Association (or whatever name is determined upon). Prerequisites would be that they must: be a member of the Encinitas Ranch Junior Program, be accepted in college, demonstrate potential in high school, and have shown exemplary behavior on and off the golf course. Consideration shall be given to student members who demonstrate potential and may otherwise be unable to afford college expenses. Surplus monies will go to the junior golf clinics this summer, a junior golf tournament, assorted merchandise, food and z beverage and speakers' fees (e.g. a PGA tour player to visit and speak to the juniors - usually they turn around and donate their fee to the organization). Scott Bentley said that at this time they are looking for approval from the Board for this initial two-part program: 1) yearly scholarships, and 2) take the rest of the money and spend on the Juniors' clinics etc. as outlined above. Would propose coming back with a more formal outline of the program that could be used as a marketing and advertising piece to the kids. The scholarships would be designed so that they would be kept running every year. Enough money would be put in it for the first two years so -that we would not have to do any fund raising during that time. TheMen's Club has offered to help and feels sure that they could raise enough money to keep it running every year. The scholarship moneys have to be given to the university/college in the student's name. Director Wasserman moved approval of the concept of the scholarship program and ask staff to consider leaving the Board the flexibility of the number of scholarships with the maximum of $2000 the first year, and direct staff to take care of the issues discussed. Seconded by Director Archibald. Motion was amended to read that the concept of the scholarship program be approved and the available funds to be given to J.e. Resorts to administer with periodic reports back to the Board. Seconded by Director Archibald and approved 5-0. Director Wasserman requested that the Chairman write a thank you letter to the Men's Club for their interest in the program. The Board encourages J.e. Resorts to work with the Men's Club wherever and whenever possible. 4. Approve Draft of Policy Statement re Reduction in Rounds. (Scott Bentley) Scott Bentley distributed a draft copy of several suggested policy statements to be reviewed by the Board. The plan is to post the recommended statement in the club house advising players the rationale for limiting the number of rounds. Directors approved the statement: "TO 'OUR GUESTS: Thank you for your patience and understanding during the grow-in period of our facility. In order to allow the course to properly mature, tee times will be limited on a daily basis. Thanks for your cooperation. " 5. Approve Notice of Completion of Golf Course. (Alan Archibald) Directqr Archibald advised that per the Development Agreement the ERGA Board is required to accept the golf course as completed. He is still in discussions with Environmental Golf as to what the driving range should look like upon completion, J, but did want the Board to know that formal acceptance will come back for the public improvements and filing the Notice of Completion. This allows subcontractors a 35 day period in which to make a claim for non-payment, prior to release of retention funds. Environmental Golf has been told that they need to provide As-Built drawings for the golf course before anything can be finalized. It is difficult for J.e. Resorts to maintain the course without these drawings. Item deferred to next Board meeting. 6. Discuss Status of Liquor License Application. (Scott Bentley) Scott Bentley advised that he had nothing new on this issue. He will request placing on the agenda when has something to report. 7. Status of Major Hole Sponsors. Oohn Mason) John Mason reported that as of June 12, 1998 he has sponsor signs for the rocks on holes 1, 10 and 16 and has ordered flags for the flagsticks of these holes. The cost for the tee sign plaques was included in the price of the rocks. The cost for the flags is $12 per flag, with a 2 color logo. The sponsor plaques for the golf shop are in the planning stage. They are currently choosing between one large plaque for all the sponsors, which would be less expensive, or a smaller plaque for each sponsor. The sales of the other holes are currently on hold until holes 1, 10 and 16 are completed, including the permanent setting of the rocks in the ground and the flowers surrounding each rock. At that point they will include photos of the completed tee signs, the flags and the plaques in the golf shop in their promotional brochures. Mr. Mason is working with Mark Warren and Robert Brow Marketing on this project and is anticipating completion by the next ERGA Board meeting. . 8. Discuss Changing Regular Meeting Date. o i m Benson) Following discussion and on motion by Director Wasserman, seconded by Director Kaiser, resolution No. 98-01 was unanimously approved changing the regular meeting of the Board to the fourth Thursday of the Month at 3:00 p.m. 5-0 9. Discuss Status on Cost Growth. O.Benson/ A.Archibald) Item deferred to next Board meeting. 10. Discuss Proposal for Future Clubhouse Design and Concept. Manager Benson suggested that the Board consider designating a portion of the anticipated excess revenues and all the monies that come from the hotel premiums, for future enhancement of the course including a club house. 4~ Director Wigginton agreed that this was an excellent idea and suggested that, in addition, the board be given flexibility to analyze the excess revenue at each year end and determine, at that time, the actual amount to be contributed towards the club house. This would allow flexibility for unanticipated expenses during the year. Chairman Kaiser suggested that before looking for an architect, a feasibility study should be done to determine what could be accommodated. Chris Calkins also suggested that criteria should be set to determine what it is that the Board wishes to accomplish for the course and who is to be accommodated. Director Wigginton said that he felt the people using the course and J.e. Resorts, the operator, would be the best ones to design a preliminary program and the architect be asked to design a clubhouse according to the program specifications. Director Wasserman said he felt it would be desirable to include the community in the design process as much as possible. Chairman Kaiser indicated that there is a definite need in the community for a facility that would accommodate large groups of people. Manager Benson said that based on this discussion, he would propose setting up accounts to identify and track revenues coming in from the hotels. Scott Bentley indicated this would be easy to do by setting up a hotel key on the computer system. When they play under that rate it will be simple to track and record revenue. Will provide monthly totals. Director Kaiser moved that the hotel premium revenues be put into an earmarked account, seconded by Director Wasserman. Approved 5-0. 11. Potential Course Enhancements. Director Archibald said that quotes for the patio covers had been requested. Scott Bentley advised that the bag racks have been installed. JC Resorts ran the lumber costs through their account and also the labor costs. 12. Discussion/Direction Concerning Course Operations, Conditions Needing Change. Nothing for discussion. 13. Report and Review of Maintenance Issues. (David Wigginton) Director Wigginton requested authority to install the rain gutters around the club house. They are doing a lot of work in the planter areas, and putting borders throughout. Gutters will keep the roof runoff water on the concrete walks rather than continually washing off the soil in the planter beds. Does not believe this would be too expensive but it definitely needs to be done. 5 Director Wasserman moved approval of giving Mr. Wigginton the authorization requested, seconded by Director Archibald. Approved 5-0. 14. 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.] Manager Benson distributed copies of a letter from Paul L. Reed, Executive Vice President of J.e. Resorts, Inc., confirming the "key employees" as designated under paragraph 3.1 (b) of the Management Agreement. They are: Scott Bentley, Director of Golf Operations, responsible for the overall management of the facilities, including shop operations, merchandising and food and beverage operations; Robert Powell, Head Golf Professional and on-site manager; and Mark Warren, Golf Course Superintendent, responsible for golf course maintenance. Director Wasserman said that on behalf of the board members he wished to express a special thank you to Director Kathy Riggins, who is leaving the community and the ERGA board, for not only being an outstanding board member but for the extra effort she contributed to the successful inaugural tournament. 15. Next Meeting - Thursday, July 23,1998 at 3:00 p.m. 16. Items for future agenda: a. Status of Major Hole Sponsors. Uohn Mason) b. Status of Cost Growth. U.Benson/ A.Archibald) c. Approve Notice of Completion of Golf Course. (A. Archibald) 17. Adjournment Chairman Kaiser adjourned meeting into a closed session at 4:10p.m. Respectfully submitted, /-\ "." (,~-.-J1 J. \ ,~:!" \ /') . / I O\.-d-l/l_CCO c:fc ~t L ,-J Patricia Drew Secretary /'1, 1/ i) < Z" titglA~( '0 {Vt7=-. Edward Kaiser Chai rman 6 RESOLUTION 98-01 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ENCINITAS RANCH GOLF AUTHORITY AUTHORIZING CHANGING THE DATE OF THE REGULAR MEETINGS OF THE BOARD WHEREAS, the Encinitas Ranch Golf Authority (ERGA) ByLaws call for regular meetings on the first and third Thursday of the month; and WHEREAS, since January 1997 the Board has discontinued meeting on the first Thursday of the month; and WHEREAS, the third Thursday is not a convenient day for several of the Board members; NOW, THEREFORE, BE IT REVOLVED by the Board of Director of the Encinitas Ranch Golf Authority to change the regular meeting date to the Fourth Thursday of the Month at 3:00 p.m. at Encinitas City Hall. PASSED AND ADOPTED this 11th day of June, 1998, by the following vote, to wit: AYES: Directors Kaiser, Riggins, Archibald, Wasserman and Wigginton. NAYS: None ABSTAIN: None ABSENT: None It ~t}L ~ / Edward Kaiser, Chairman ATTEST: /~, / I X., f ,,\ /' ~/ ~.. 6.y-tv-v Patricia Drew, Secretary