1999-05-27
RANCH
CITY OF ENCINITAS
ENCINITAS RANCH GOLF AUTHORITY
MINUTES OF REGULAR MEETING
THURSDAY, MAY 27,1999 at 3:00 p.m.
CALL TO ORDER/ROLL CALL
Chairman Kaiser called the meeting to order at 3:07 p.m.
Directors Present: Edward Kaiser, Susan Lamson, Robert Acker, Alan Archibald, David
Wigginton, being all of the directors.
Also Present: Chris Calkins, Carltas Co.; Scott Bentley, Rod Linville and Mark
Warren, J.e. Resorts; J. Mickey Scoffin, President, Encinitas Ranch
Men's Golf Club; Ure Kretowicz and Jack Robson of Cornerstone
Communities; Mayor Sheila Cameron, Nancy Sullivan and Diane
Langager, City of Encinitas; ERGA Manager Jim Benson and Pat Drew,
Board Secretary.
ORAL COMMUNICATION [3 minutes for each speaker. Maximum 15 minutes for
oral communication.]
No speakers.
AGENDIZED BUSINESS ITEMS
1. Approve Minutes of:
a) Regular Meeting of April 22, 1999;
b) Adjourned meeting of April 27, 1999;
c) Adjourned meeting of April 29, 1999.
Chairman Kaiser moved approval of all minutes, seconded by Director
Wigginton. Approved 5-0
2.
Men's Golf Club Year 2000 Tournament Schedule.
(Mickey Scoffin)
Rod Linville said he had reviewed the proposed tournament schedule with
President Mickey Scoffin. The only concern he had was with the pace of play. To
overcome this they had moved their start time back a little to allow regular
residents and public players to start before their tournaments start. Mr. Scoffin
said the Club is aware of the problem and they are thinking about putting their own
marshals out there to improve the speed of play.
Director Wigginton asked how this affects the play and tee time requests by local
community players when there are big weekend tournaments. Mr. Linville advised
that 64% of the Men's Club players are local residents, as are many of the Ladies'
Club members. Other tournaments that are scheduled for weekends are required
to start at 10 a.m. to allow residents to have the early tee times.
The Ladies' Club does not book tournaments on the weekend so there is no
conflict with them. The impact on revenue would depend upon the rates yet to be
decided for fiscal 1999/2000. Also, other tournaments pay a premium over
regular rates to be able to play on the weekend, so this is not considered lost
revenue per se. Mr. Scoffin reminded the board that his Club turns in $2500 to
$3500 per tournament to the Pro Shop in merchandise prizes, the Club takes no
prize money.
Chairman Kaiser said that he would recommend going with ten tournaments rather
then the requested twelve, eliminating April and December. In this way there
would be less impact on overall revenues.
Chairman Kaiser moved that the proposed 10-month tournament schedule
be approved, seconded by Director Archibald. Approved 5-0.
3.
Wh Hole Subcommittee Update \ 1{')/L/9CI
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Chairman Kaiser reported that together with R~I ili'lfifle and Scott Bentley he r.JJ
rec;ently met with Cary Bickler. They tried to keep the meeting focused on the
safety issue of holes 14 and 15. Mr. Bickler was pleasant and receptive to the
ideas that had been discussed by the Board. Told him that the Board agreed with
his desire to keep hole 14 a par 4, so long as it can be made safer and playable.
Mr. Bickler pointed out th~ one of his earliest suggestions was to plant a stand of
trees close to the tee, not glose to the 15th green. This is also one of the Board's
recommendations. 1\
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Mr. Bickler made a request, which Chairman Kaiser thought was reasonable, to be
reimbursed for some of his out-of-pocket expenses such as travel and any
payments he has to make to third-party vendors. He 'also suggested that the
Board keep in mind that any changes being made now to hole 14 also take into
consideration any changes to be made down the road. E,g. lengthening hole 15 to
make it a longer par 3. This could have some impact on what is to be done on
hole 14 now. Chairman Kaiser said that both he and Cary Bickler agree that a
committee should meet a couple of times in the next month or two to discuss the
problem on 14 and maybe not planting California native scrub now if we want to
consider moving and lengthening hole 15. Also the committee should consider
long range planning on other issues - e.g. Hole 2 where people are hitting the
green from the 5th tee, and some hitting 6th tee from the 2nd tee. Cary Bickler also
has a complaint about covering one of the trails at hole 13. He feels that there is
enough long-range planning that should be done now. These are issues that can
be tackled down the road but some planning needs to be done now.
Director Archibald said that it should be remembered that Cary Bickler does have a
two-year provision in his contract where he was going to do periodic visits to the
golf course and make suggestions; this was to be part of his basic fee. Chairman
Kaiser said he would remind him of that.
Chairman Kaiser said that while J.C. Resorts have taken certain steps to improve
the safety of hole 14, it is still not safe enough. The most pressing need right now
is to make hole 14 safe.
Scott Bentley said that during the meeting, Mr. Bickler's attorney had suggested
that if a long-term plan was developed for hole 14 that we knew was going to solve
the problem, we could work at achieving that plan in steps. If along the way the
steps that were taken improved the safety of hole 14 to the point that we thought it
was reasonably safe, we could stop. From a legal standpoint, she felt that we
should have a long-term plan in place and working towards reducing the liability.
All agree that the problem is with the tees that are elevated and the wind. We may
not be able to afford to do a $200-400,000 renovation right now, but each year we
could spend more towards it and along the way if we felt it was safe we could stop
the project and consider it done.
Both Chairman Kaiser and Mr. Bentley agreed that Cary Bickler wants to keep his
name on the golf course.
Rod Linville said they are doing a survey of the players to determine how they
play. Mark Warren has drawn a line from the right side of hole 14 and the players
are being asked to say where their ball landed from that tee. Want to see if play
can be improved by making it out of bounds to the right. Or, they could look at
possibly adding a hazard of scrub brush, shrubbery or trees.
Chairman Kaiser said the need at this time is to form a planning committee to meet
with Cary Bickler. He would suggest two board members and a couple of
members from J.C. Resorts. It we agreed that a Planning Committee should be
formed consisting of Chairman Kaiser, Director Wigginton, Scott Bentley, Mark
Warren and Cary Bickler. The Committee will meet with Cary Bickler as soon as
possible.
4. Review Hunsaker Proposals for redesign and grading of Hole 14.
Manager Benson advised that Ure Kretowicz, CEO of Cornerstone Communities
and a member partner of Encinitas Ranch LLC, had a proposal he wished to
present to the board that would basically be in lieu of Hunsaker trying to design
something where there is no design to work from.
Mr. Kretowicz said there were three issues that were still outstanding. One has to
do with the language that they have been asked to incorporate in their CC&Rs,
which Jack Robson will discuss. Another has to do with the planting and
maintenance of the slope area between their proposed project and the golf course
ownership, and third is relative to proposed grading and potential compensation to
a fund for improvements to and around the 14th hole.
Jack Robson said he had sent over the proposed CC&R language to Rod Linville
at JC Resorts who in turn had forwarded to their corporate office. He referred the
Board to the cover page which stated that the CC&R includes language that
homeowners could not use the golf course for jogging, walking their dogs, etc.
This language is also included in their master CC&Rs for all the villages throughout
their development. The board agreed they would review the document, make
any changes, and have it brought back to the June board meeting for adoption.
Mr. Kretowicz referred to his letter of May 27 relative to two issues: 1) the
maintenance of the slope that would be created between their proposed project
and the golf course, whether or not it is on golf course property or their property;
and (2) the line of sight issue.
They are proposing is that 1) they will include into the maintenance of the Encinitas
Ranch HOA the planting and maintenance of the slope. Everything from top of the
slope to the toe of the slope will be planted by Cornerstone as the developer, and
maintained by the Encinitas Ranch HOA. What is needed from the ERGA board is
some agreement to allow them access in order to maintain the slope. With regard
to the planting of the slope they would suggest that if ERGA has some ornamental
planting, e.g. ivy, then where they are adjacent to a lawn area they will use
ornamental ground cover on the slope. If the planting in the area is scrub or open
space, then they will use appropriate plant material to blend in. Mr. Kretowicz
stated that when ERGA has a plan for the area they will be pleased to follow the
plan and plant whatever is appropriate.
Diane Langager explained that in order for Cornerstone to process the boundary
adjustment for their tentative map, ERGA needs to supply a letter saying the lot
line adjustment is OK (as conceptually agreed to at the last board meeting).
Referring to Item 2 concerning grading and the sight line issue, Mr. Kretowicz said
that if the concept is approved Cornerstone will work with City Engineer Archibald
to prepare a more precise contoured grading plan so that when driving down Quail
Garden Drive one is not looking at a 2-1 slope. They would like to undulate the
slope, both vertically and horizontally, so that it is a little more attractive. Also, in
their proposal, J.C. Resorts would remove the sod and depending on the grades,
replace the sods after completion of the grading. In conjunction with this, they
would propose making a contribution of $35,000 to a fund for improvements in and
about the 14th hole. This offer is only good if their proposal is accepted.
Director Wigginton said that he did not see the need to disturb any more of the site
than actually is needed until the Board comes up with a plan for hole 14. He felt
that it would be more beneficial to ERGA if Cornerstone could get by with the
green area (on the map) until the Board has an idea of where it is going. Director
Archibald said that regardless of what they do with the area, ultimately the tee will
have to be lowered - it cannot be used at that elevation. To forestall Director
Wigginton's concern about losing the resource material (soil) Mr. Kretowicz
assured the Board that whatever dirt is removed they will use and then when
ERGA/J.C. Resorts is ready they will give back an equal amount of dirt. If the
Board goes ahead and approves their current proposal Cornerstone will donate
$35,000 towards improving/enhancing the hole. Director Wigginton said that his
other concern was repeating the exercise of turf removal, irrigation retrofitting,
concrete demolition etc. Director Archibald reminded the Board that since this
could prove to be a non-play area maybe they will not want or need to put turf back
but in the interim switch to natural habitat or hydro-seed with a native mix.
Diane Langager said that obviously the hole 14 issue was not going to be shown
on the tentative map as being resolved, but it would be very helpful as a part of the
TM if the line of sight issue could be resolved at this time. She stated that at this
time there are two options: 1) a letter from ERGA saying "we agree to let
Cornerstone grade whatever it takes to fix the line of sight issue;" 2) OK what is
being proposed today in the letter of May 27, 1999. That way the grading and line
of sight correction is shown on the tentative map and is officially included in the
COT, it's referenced and documented everywhere. Number 2 option is Planning
Department's preferred option.
Mr. Calkins recommended that ERGA have an agreement with Cornerstone so
they can proceed with processing their maps, and pointed out that grading will
probably not take place before the end of the year anyway. In that time maybe
ERGA will develop a plan for use of the area.
Director Archibald moved that the Board approve the offer in concept, to
work out the details and give Planning Department a letter saying that we
have agreed to give Cornerstone the line of sight necessary to make this
area safe. If the offer ends up with a variable grade slope and Mr. Kretowicz
wants to landscape and maintain, this should be included as part of the offer
but not necessarily accepted in the final stages.
Chairman Kaiser recommended that rather than a motion he and Manager Benson
work with Cornerstone on Director Archibald's direction and call a special meeting
to ratify an agreement once it is reached. Board agreed.
5. Discuss Use of Excess Land (Hole 14).
No excess land to discuss at this time.
6.
Progress Report from Bridge Sub-committee
(A. Archibald/D. Wigginton)
Director Archibald advised that his committee cannot do anything on this until he
gets the topography that Cornerstone is having prepared. He did state that he felt
the cost was going to be $250,000.
7.
Review Summary of April, 1999 Revenues and Expenditures/Financial Statement.
(Scott Bentley)
Rod Linville reported that total revenues came in at $325,283, or 109% of budget.
Expenditures were $209,708 or 112% of budget. This was incurred by some
operational improvements relative to widening of the cart paths and concrete
expansion behind the Pro Shop. Looking good for the year-to-date. Net income
was $115,128 or 103%. Total rounds were 6171 compared to a budget of 6285.
Some rounds were lost because the grounds were aerated and closed for a day
and a half, but overall it was a good month.
8. Review Projections for Meeting Golf Revenue Bond Restriction on Use of Excess
Golf Course Net Revenues. (Mgr. Jim Benson)
Mr. Benson reviewed the projections for me'eting the provisions in the Official
Statement and said he felt confident that ERGA would be able to meet the
cumulative net operating income that is a requirement of that provision (ref. Page
30 of the O.S.). Unless there are some major changes we are going to be able to
meet the $2.2 million. He is projecting there will be $1.4 million by the end of this
year. However, we do need to validate the mechanics of how this happens for the
investor and underwriter, and determine that the language is being interpreted
correctly. He said that before going to the investor he wants to go to the
underwriter to make sure that he concurs. Will bring a report back to the next
meeting.
9.
Golf Course Budget for FY 1999/00.
(Scott Bentley/Rod Linville)
Scott Bentley reviewed the four proposals which had the same number of rounds
and relatively all the same expenses. The big difference is in the proposed new
rates. Also, a new position for a corporate merchandizing person has been added;
the club will be charged for one day a week. The proposed rate increases are
anywhere from no increase to a $4 rate increase. He feels that the market is very
strong and would definitely bear proposal 3 or 4.
Mr. Calkins said that he had made an analysis and prepared a 1 O-year forecast of
the implications of the pO'rtion of the CFD bond and its impact on future revenues
which are first to be paid back, and the sales tax advances made under the terms
of the Development Agreement. His concern is that based on a 1 O-year forecast
he has prepared, even adopting the highest rate increase, it will be extremely
difficult to assure that all the obligations are met. He does see some solutions and
has prepared a letter which he will give to Mr. Benson for review and discussion at
the next Board meeting. Hopefully this can be done before adopting the new
rates and budget. His overall conclusions are that if the Board does not adopt
proposals 3 or 4 in order to satisfy all the obligations, increases larger than 3% will
have to be adopted in the coming years.
Chairman Kaiser recommended that the nine-hole rate be increased to the twilight
rate and weekday resident and J.C. Club to $30.00. Director Archibald
recommended that the Friday and weekend rates be increased by an additional
dollar. Chairman Kaiser also agreed that they should have a special meeting in
June to discuss and review the rates after Manager Benson has had time to review
the numbers presented by Mr. Calkins. It was agreed that Proposals 1 and 2
should be eliminated, stay with 3 and 4 and add 5 and 6 for review at the
adjourned meeting on Wednesday, June 9, 1999 at 9:30 a.m.
10. Update on Application for Liquor License.
(Scott Bentley)
Nothing new to add.
11. Proposed Signage for Golf Course Addressed to Non-Golfing Public.
(Scott Bentley)
Rod Linville advised that he will bring to the next meeting a proposal for a simple
sign - e.g. "Access to Golf Course Limited to Golfers only."
Mr. Calkins suggested some additional language to the effect that "they proceed at
their own risk."
Mr. Linville said they are will have their attorney review the language.
12. Potential Course Enhancements.
Director Archibald said that at hole 14 the golfers have created their own steps.
Water coolers are being up-graded and replaced.
Mark Warren said they are having a problem with the cart tires - having to do a lot
of replacing.
13. Discussion/Direction Concerning Course Operations, Conditions Needing Change.
Adidas golf tournament originally proposed for August has been cancelled. They
will come back to Encinitas for a date for next year.
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.]
No reports.
15. Next Regular Meeting - Thursday, June 25,1999 at 3:00 p.m.
16. CLOSED SESSION: CONFERENCE WITH REAL PROPERTY NEGOTIATORSI
AUTHORITY: Govt. Code 54956.8
PROPERTY: AREA ADJACENT TO TEE OF GOLF COURSE HOLE 14
AUTHORITY NEGOTIATOR: MANAGER BENSON
TO NEGOTIATE WITH: CORNERSTONE COMMUNITIES
UNDER NEGOTIATION: TERMS AND CONDITIONS OF USE.
No need for closed session.
17. Items for Future Agendas:
a) Approve Landscape Maintenance Agreement (Mgr. Benson)
b) Approve Notice of Completion of Golf Course (Alan Archibald)
c) Update from Bridge Subcommittee (A.Archibald/D.Wigginton)
d) Review Summary of Revenues and Expenditures (Scott Bentley)
e) Liquor License. (Scott Bentley)
18. Adjournment.
Chairman Kaiser adjourned meeting at 4:55 p.m. to 9:30 a.m. on Wednesday,
June 9, 1999.
Respectfully submitted,
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Patricia Drew
Board Secretary
Edward Kaiser
Chairman