2000-02-24
RANCf^I CITY OF ENCINITAS
ENCINITAS RANCH GOLF AUTHORITY
MINUTES OF REGULAR MEETING
THURSDAY, FEBRUARY 24, 2000 at 3:00 p.m.
CALL TO ORDER/ROLL CALL
Chairman Kaiser called the meeting to order at 3:55 p.m. (Meeting delayed awaiting the
arrival of Directors Miller and Archibald.)
Directors present: Edward Kaiser, Susan Lamson and Alan Archibald.
Director Miller arrived at 4:00 p.m.
Director absent: David Wigginton.
Also present: John McNair, Rod Linville and Mark Warren of JC Resorts; Phil Cotton,
City of Encinitas, Manager Jim Benson and Board Secretary Pat Drew.
ORAL COMMUNICATION [3 minutes for each speaker. Maximum 15 minutes for
oral communication.]
None.
AGENDIZED BUSINESS ITEMS
1. Approve Minutes of Special Meeting of December 16, 1999; Regular meeting of
January 27, 2000; Special meeting of February 1, 2000.
Chairman Kaiser pointed out that in the minutes of December 16, 1999 he is shown
as having seconded two motions but the minutes do not indicate which director made
the motion. Director Lamson agreed that for the records she made the motions.
Director Archibald moved approval of the minutes of the meetings of December 16,
1999, January 27, 2000 and February 1, 2000, seconded by Director Lamson.
Approved 3-0-2 (Wigginton and Miller absent).
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2. Review Summary of January 2000 Revenues and Expenditures/Financial Statement.
(Rod Linville/John McNair)
Rod Linville reviewed the financial report for the month of January 2000. Total
revenue of $317,184 was 114% of budget. Expenses came in at $197,296 or 103%
of budget. This resulted in a net income of $118,758 being 140% of budget. Total
rounds for the month were 5,576 compared to a budget of 4,925 for 113% of budget.
Year to date rounds are 43,471 compared to a budget of 41,323 for 105% of budget.
3.
City of Encinitas Amateur Championship
(Rod Linville)
Mr. Linville said they would like to propose putting on a golf tournament called the
Encinitas Open, or something similar, to determine a City champion. Publicity would
be very good for both the City and the golf course. It would be open to amateurs only
and very similar to the open tournaments that the Cities of San Diego and Long Beach
put on. Would propose that it be a two-day, 36-hole, event, possibly July 22-23,
open to amateurs only. He said he has not set an entry fee at this time, nor set a date,
pending the Board's approval to proceed. If the Board is receptive to the proposal he
could bring back details to the next Board meeting.
Director Miller joined the meeting at this point.
Mr. Linville advised that the entire tournament, including advertising, would be run
by Encinitas golf course staff.
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Director Archibald moved that the Board approve the proposal In concept,
seconded by Director Kaiser. Approved 4-0-1
Mr. Linville was requested to check dates of other tournaments, particularly San
Diego and Long Beach, to be sure the Encinitas dates do not conflict.
4. Request from the San Dieguito High School Academy to host the CIF Golf
Championship on May 11, 2000 at the Encinitas Ranch Golf Course.
Uim Benson/Rod Linville)
Manager Benson referred to the letter of request from Superintendent Bill Berrier of
the San Dieguito High School District. The San Dieguito Academy has been asked to
host the CIF Golf Championship for the high schools in the Coastal League of the San
Diego Section on May 11. The League has requested that the fee be limited to $5 per
participant. There will be 70-75 participants.
Mr. Linville said that in addition he had been contacted by one of the coaches with
the same request.
Director Kaiser moved that the Board permit the play on May 11, 2000 with a 10:00
a.m. tee time and green fee of $11.00. Seconded by Director Archibald.
Approved 4-0-1.
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Mr. Linvi lie to contact and advise Superintendent Berrier.
5.
Encinitas Chamber of Commerce Sundowner.
(Rod Linville)
Mr. Linville advised that the Golf Course is a member of the Encinitas Chamber of
Commerce and that he would like to recommend that they host a Sundowner in order
to showcase the course. They could set up a putting contest on the putting green,
could have John Mason and Greg Casagranda there to give some free lessons, and
maybe something on the driving range. There would be costs involved to cater the
refreshments etc. The Chamber sets up their own bar. Mr. Linville said that if the
Board is interested in doing a Sundowner then he would contact the Chamber and
have the information at the next meeting. The Board requested that he proceed with
contacting the Chamber.
6. Report/Recommendations from JC Resorts on Improvements to Hole 7 Fairway.
(John McNair)
Mark Warren reviewed the options for improvements to Hole 7.
Option #1: Remove three feet of soil, bring in two feet of gravel, cap with a foot of
topsoil and then lay sod. ' $100.500.00
Per the Board's request this has now been broken down to two additional options:
Option #2: Remove 16" of existing soil over approximately 30,000 sq. f1.; install
sub-drainage - 4" drain pipe in trench and fill with gravel; cover entire
30,000 sq. f1. with 4" of gravel, cap with 12" of top soil; sod entire
area. $57.232.00
Option #3: Remove 24" of existing soil over approximately 30,000 sq. f1.; cover
entire area with 12" of gravel; cover entire area; cap gravel with 12" of
top soil; sod entire area. $69.389.00
The basic difference between these two options is the sub-drain installation.
Option #2 installs a 4" drain pipe going an additional 16-20"deep; filling that trench
with gravel and the 4" pipe and exiting it down to the storm drain system that's closest
to the tee on #7. On Option #3 they would just put a foot of gravel in. The gravel
costs would increase because they would be using 1445 tons as opposed to 725 tons of
gravel. This would be doing an entire bed of gravel and allow the water to move
through it and cap with a foot of soil.
The proposal from Hazard is solely for the removal of the existing soil which they
would move on-site to a lot designated by Cornerstone where they have a fill. Hazard
would also bring in the new topsoil from the site. The purchase of topsoil would only
be necessary if the soil on site is no longer available. This depends on when the Board
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makes its decision, whether Mr. Warren will have to purchase soil to do the 12" cap. If
this is necessary he will need 1200 yards of soil at $16 per yard.
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Chairman Kaiser asked if option #2 would solve the problem for the long term. Mr.
Warren said he couldn't guarantee anything but felt it would for the long term.
Basically, option #2 would be building the fairway just like they would a green. He
feels this should definitely work for ten years at least. After that time there can be no
guarantees.
Mr. McNair said he would recommend option #2.
Director Archibald said the only question would be whether there is sufficient cash
available. Manager Benson stated there would be sufficient cash; however, the biggest
concern would be Carltas' concern with this kind of expenditure because what we do
comes back out of the bottom line of available cash for reimbursement of their excess
costs on the construction. Mr. Calkins agreed that the Board should go ahead, approve
and get the job done, otherwise it will be a continuing problem. If it is done now it will
be ready for summer play.
Director Archibald said that Mr. Warren should not wait later than April to do the
work so as to be ready for summer play.
Chairman Kaiser moved adoption of Option #2 to be funded from general
operations, seconded by Director Archibald. Approved 4-0-1.
7. Approval of Assignment Agreements between CJ Resorts, Inc. and JC Resorts LLC
for:
a) Consulting & Management Agreement
b) Food & Beverage Lease and Concession Agreement
Uim Benson)
Manager Benson advised that Paul Reed, Exec. Vice President of JC Resorts, had
called him last week asking to put this item on the agenda. They are doing some
corporate restructuring to resolve a c.j Resorts issue that has always been a little
confusing, since everyone knows them as JC Resorts. From ERGA's standpoint there
is some concern about doing this. In Mr. Reed's cover letter he refers to the fact that
these agreements really don't have to be approved by ERGA. Specifically, in Article
XIV.1 of the existing Management Agreement there is a clause that states "not
withstanding the above, management may transfer or change the ownership of stock
between Kathryn S. Colachis, a member of her family, a trust for the benefit of
Colachis, or a member of her family, any partnership, corporation, or other legal
entity owned or controlled by or for the benefit of Colachis or a member of the family,
or any combination of the foregoing without the prior written consent of ERGA."
This would indicate that there is a provision in the existing agreement that appears to
allow what is being done without requiring ERGA's formal approval.
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Mr. McNair said that Mr. Reed would like the agreement/action approved for
legality's sake. He requested that the Chairman be authorized to sign contingent
upon the bond issue being worked out with the bondholder, so they can go forward.
Manager Benson said that he and Chairman Kaiser have some concerns since they
don't know what is in JC Resorts LLC He does have the new structure of Cj Resorts
which is a modification of what was used in 1996 for the Management Agreement.
The new CJ Resorts, Inc. shown on the proposed structure includes Encinitas Ranch,
of course, and also eliminates a couple of courses they no longer manage. What he is
concerned about is the relationship between CJ Resorts and KSC Management and
how JC Resorts LLC fits into that.
Chairman Kaiser said that if the intent of the agreement is to have JC Resorts LLC
become the management company for all of the golf courses, and if the intent is to
wind down the business affairs of CJ Resorts so that it really doesn't do anything,
then he couldn't see where ERGA is involved at all. Mr. McNair agreed that this is
the intent.
Mr. Benson confirmed that the contract for the Golf Course Consulting and
Management Agreement is between ERGA and CJ Resorts, Inc., and it would therefore
transfer to jC Resorts LLC
Chairman Kaiser made a motion that the Board authorize Manager Jim Benson to
sign an acknowledgement of the transfer, when he is satisfied and on receipt of a
letter from JC Resorts notifying ERGA of the transfer of the contract. Director
Lamson seconded. Approved 4-0-1.
8.
Approval of Lease and Concession Agreement with jC Resorts LLC for the Ranch Golf
School. Uim Benson)
Manager Benson advised that this is a brand new agreement. Paul Reed has taken the
Lease and Concession Agreement for the food and beverage and conformed into an
agreement for the golf school. It was confirmed that jC Resorts LLC would be
responsible for the trailer, cameras, utilities, and all equipment. The assets will remain
theirs, and for the right to operate the school ERGA will receive 10% of the gross
proceeds.
Director Miller recommended that the General Counsel review and approve the
agreement as to form.
Chairman Kaiser moved that the agreement be approved subject to review by the
attorney as to form, and to include the attorney as a signer on the agreement, and to
authorize Manager Benson to execute the agreement. Seconded by Director
Archibald. Approved 4-0-1.
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9. Potential Course Enhancements.
Rod Linville advised that he has received one proposal from Leisure Design for
$14,000 for the Starter and Range buildings. He has distributed copies to sub-
committee members Directors Lamson and Wigginton and will proceed as directed.
Chairman Kaiser asked about the restroom. Manager Benson said he has had
communication back from Leucadia County Water District that they are willing to
cooperate with ERGA. He owes them a letter which they will put on the next board
agenda to take appropriate action. There are some obligations for Carltas in terms of
the rest of the golf course. It's good news for ERGA but there are some dollar
implications for Carltas.
Director Archibald said he would like to replace the brome grass area. He requested
a report back from Mark Warren at the next meeting relative to a substitute grass, e.g.
a clumping grass that is very drought tolerant and grows to about 12" high.
10. Discussion/Direction Concerning Course Operations, Conditions Needing Change.
Rod Linville said they frequently run into problems with a shortage of golf carts by
mid morning, particularly at the weekend. With a little restructuring they could add
ten carts in the cart barn for recharging. He has talked to EasyGo relative to their
charge for adding carts to the fleet and will bring his proposal back to the next board
meeting. This will include estimated costs for restructuring the cart barn, etc.
11. 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.]
Director Archibald gave an informational update on hole 14 and the changes he is
proposmg.
Phil Cotton reported that they are proposing to install a fence along Paseo de las
Flores. This would be either down both sides of the road or they would install a gate
at the maintenance-shed road, and one coming off hole #1 so that the gates could be
locked after-hours to keep people from driving out onto the golf course. Right now
he has a cost of $10 per linear foot for a 4-rail vinyl fence. If both sides of the road
are fenced - from Quail Gardens Drive past Hole #2 - the cost would be
approximately $19,000. If just the north side of Paseo de las Flores is fenced, past the
maintenance-shed road, it would be approximately $12,800. He wi II bring a report to
the next meeting.
Manager Benson gave a brief update on the plans for the driveway. Phil Cotton has
got a clearance from Engineering on the driveway demolition and restructuring of
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what used to be the south driveway going into the clubhouse. The plans are done
and the final decision is that there will be no circulation control. This was discussed
at length. Concerns were that if arrows are put in and people go against the arrows
ERGAis probably more liable than if it just doesn't try to control the traffic. There
was unanimous support for no circulation control of the parking lot. The work will
commence, depending on Hazard's schedule, within probably a week. The work will
cover the driveway, the curb that needs to be installed, and the drainage that captures
the water sheet flowing off the south end of the driveway to get the water out into the
street. They also discussed whether to leave the narrow passageway between what
used to be the north and south portions as a way to slow down the vehicles. There
had been talk of widening it but it was concluded that this would only allow people
to drive faster. It will be widened at the turning point for the 14 wheelers to get
through without running up the curbs.
Director Archibald asked about the landscaping and was told that Mark Warren is still
working on this.
12. Next Meeting - Thursday, March 23, 2000 at 3:00p.m.
13. Agenda Items for FutureMeetings:
a)
b)
c)
d)
e)
Fencing on Paseo de las Flores.
Chamber Sundowner
Status of Hole 7 Improvements
Additional Golf Carts.
Replacement of Brome Grass.
14. Adjournment
Meeting adjourned at 5: 10 p.m.
Respectfully submitted,
//J-A- \ '\
~.~ )Jr~0v"
Patricia Drew, Board Secretary
~jJ1~
Edward Kaiser, Chairman
(Phil Cotton)
(Rod Linville)
(John McNair)
(Rod Linville)
(Mark Warren)
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