2000-10-05
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CITY OF ENCINITAS
ENCINITAS RANCH GOLF AUTHORITY
MINUTES OF SPECIAL MEETING
THURSDAY, OCTOBER 5,2000 AT 10:00 A.M.
Carnation Room, Civic Center
505 South Vulcan Avenue
CALL TO ORDER/ROLL CALL
Chairman Kaiser called the meeting to order at 10:01 a.m.
Directors Present: Edward Kaiser, Susan Lamson, Alan Archibald, Kerry Miller, David
Wigginton, being all of the Directors.
Also Present: John Nabors, Carltas Co.; john McNair, Rod Linville, and Mark Warren
of j.c. Resorts; David Balser, Citizen; Leslie Suelter and Nancy
Sullivan, Staff: Secretary Pat Drew
ORAL COMMUNICATION [3 minutes for each speaker. Maximum 15 minutes for
oral communication.]
None
AGENDIZED BUSINESS ITEMS
1. Approve Minutes of Regular Meeting of August 24, 2000.
Director Archibald moved approval of the Minutes of the Regular Meeting of
August 24, 2000, seconded by Director Miller. Approved 5-0
2. Review Summary of August, 2000 Revenues and Expenditures/Financial Statement..
(Rod Linvi lie/john McNair)
Mr. Linville reviewed the August financial statement for the Directors. Total revenue
for the month was $478,732 compared to a budgeted amount of $393,591 or 122%
of budget; total expenses were $256,289 compared to budget amount of $229,203 or
112% of budget; net income was $220,159 compared to a budget of $162,104 or
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136% of budget. Total rounds were 7,462 compared to budget amount of 6,680 or
11 2 % of budget.
For the year the net income was $451,479 compared to budget of $352,150 or 128%
of budget to-date. Rounds are at 15,248 compared to budget number of 14,180 or
1 08 % of budget.
August was again a very good month, but Mr. Linville reported that while they don't
have the financials for September he does know that they did exceed budget by a few
thousand dollars but were short of budget on rounds, so there was a slight turn down
there.
Director Wigginton asked a question concerning the $26,000 over budget for
expenses. Mr. McNair explained that it was basically due to lesson labor and
revenue which had to be recorded. Lesson payroll was over budget by $20,201.94
but the lesson revenue was $38,423.00 compared to a budget of $9,250.00. Mr.
Linville was actually under budget by $4,000.
3.
Continue Discussion of Replacement Plants for the Brome Grass.
(Mark Warren/john McNair)
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Mr. Warren said he had nothing to add to the previous discussions. He is awaiting
decisions of the Board as to the desired replacement plants but in the meantime is
moving ahead with the work on hole 14. He is anticipating the labor work on 14
will be completed by midday next Saturday.
Chairman Kaiser asked that the item be placed on the next agenda and requested that
all Directors review the information package on suggested plant material that Mr.
McNair had sent out four months previously when the subject was first being
discussed. Mr. Archibald was also asked to check with Ure Kretowicz regarding the
status of the entrance monument and report back at the next meeting.
4.
14th Tee Update.
(Mark Warren/john McNair)
Mr. Warren reported that the process should be completed by the weekend. All the
sod will be laid and at that point he will have the native material that had been
pushed aside ready to be mulched and then get into the replanting of part of that
slope. At that time they will be looking at when they want to begin phase two of the
planting of the slope between 14 and 15.
Chairman Kaiser complimented Mr. Warren on the work that has been done on hole
14. It is antici pated open i ng date of the hole wi II be in about the second week of
November. Overseeding of the course is planned for October 23 to November 3.
5. Quail Gardens Drive Bridge. (Bridge Subcommittee/john Nabors/jim Gay)
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Mr. Nabors reported on the meetings of the bridge subcommittee and Planning
Commission subcommittee. They have produced a plan for a twelve-foot
bridge that works and is right on the budget amount of $322,000. A seven-foot
bridge with a similar look would be $23,000 less. Mr. Nabors showed the
board the drawing of the proposed bridge and described its features.
Director Miller moved that the Board accept the design for a twelve-foot
width bridge, authorize final design drawings on the bridge including the
amendments to the center support structure, as described, and that Mr.
Nabors then proceed with resubmittal tothe City.
Under discussion, Director Lamson asked Mr. Nabors if he had information on
a time frame and the additional cost for adding to the center support. Mr.
Nabors responded that he did not have the information since Hazard'
Construction was swamped with work but hoped to be able to get to it within
the following week.
Motion seconded by Director Lamson and approved 5-0.
6.
Discussion of CFD Bond Payments Schedule.
(Nancy Sullivan/Leslie Suelter)
Nancy Sullivan reviewed her report which explained where the money goes to in
accordance with the Indenture of Trust in the Bond document, once the Golf Course
operations and maintenance expenses are paid off. Last year ERGA: 1) paid
operating and maintenance costs out of gross revenue; 2) set aside a capital reserve
amount of 2.5%; 3) golf course bond payments were made from the net revenue as
required; 4) on September 1, 2000 the one-time payment of golf course construction
overruns of $1,057,000 were paid. After that the debt service on the CFD golf course
bonds should be paid; however, this year there were no funds available for this
payment, primarily because operating cash was being spent on capital items. Mr.
Linville said that since the golf course has been doing so well, why isn't there more
money available. Ms. Sullivan noted that at year-end there was approximately.
$86,000 in cash available after the $1,057,000 construction cost overrun payment.
Chairman Kaiser added that the real issue was that the golf course cost too much to
build, actually more than the bond issue provided for. Carltas picked up the cost on
the overruns and that had to be paid back to them first. Without that expense ERGA
would be current in the CFD-Golf payments. Ms. Sullivan explained that the
management-company, JC Resorts, can maintain a cash balance to cover current
month and the next month's expenses which eliminates the use of those funds for the
CFD golf bond payments. That amounts to about $500,000. She also advised that by
june 30, 2001 ERGA should have $657,000 available to pay $471,000 for the current
year CFD costs, and the balance of about $186,000 to payoff 1997 CFD costs. At
this rate it will take four or five years to catch up. Ms. Suelter suggested that maybe it
would be appropriate for them to prepare an analysis for the next four years to have
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available for such time as the Board may wish to consider refinancing the bonds and
other capital improvements.
7.
Discussion of Bylaws; Possible Changes.
(Chairman Kaiser)
Chairman Kaiser advised that he and City Manager Miller had met to review the
bylaws and came up with some amendment suggestions.
Page 3 of the bylaws states that Category 2 directors hold office by virtue of a written
appointment filed with the Secretary of the Board to serve at the pleasure of the
appointing authority. It was determined that Director Lamson was appointed by
Carltas to fill an existing term and therefore both she and Director Kaiser, who is
appointed by the City Manager, are due to be re-appointed according to the bylaws.
Page 4 says that the regular meetings shall be held on the first and third Thursdays of
each month at 3:00 p.m. Section to be amended to show monthly meetings on the
fourth Thursday. It was agreed to amend the bylaws to show changes.
Page 6, Item B, ERGA Manager. The bylaws state: 1) the Assistant City Manager of
the City shall serve as the Manager of ERGA, and 2) The ERGA Manager shall: (a)
assist the Board in accomplishing its responsibilities; (b) carry out the directions of
the Board of Directors; and (c) coordinate the efforts of the officers and staff provided
by the City. Chairman Kaiser said that he and City Manager Miller agreed that ERGA
no longer needs a full-time ERGA manager since ERGA has the backup of City staff. It
was agreed to reword and amend the item to read: "The ERGA Board may, from time
to time as needs dictate, appoint a manager."
Chairman Kaiser moved that the above changes be made to the bylaws.
Director Miller moved to amend the motion that the bylaws be revised to reflect the
changes that have been discussed, and to be brought back to the next Board
meeting for approval. Seconded by Director Kaiser, approved 5-0.
8.
Hole 13 Safety Fencing - Requirement for Design Review?
(Director Wigginton)
Director Wigginton reported that he had obtained all the necessary permits and
anything required administratively, with the exception of the $4200 required for
construction. If ERGA wants to appropriate the funds they are prepared to install the
fence.
Director Archibald asked if this is to be a fence for a trail where people ride horses. If
it is, then there wi II be a problem because a person on a horse is going to be higher,
creating the potential for the person to hit his head on the overhang. Director
Wigginton explained that the primary intent of the fence is to protect pedestrians from
flying golf balls. He would recommend that if the question of equestrians on the trail
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comes up, the Board look at the whole question of equestrian use. He believes this
should be a policy issue that ERGA should address. However, whether horses are
allowed on that stretch of trai I or not, there wi II have to be someth i ng there to protect
the users from errant golf balls. There was a consensus that the issue of trai I usage
should be brought to the next board meeting. A decision on the safety fencing at hole
13 was deferred to the next meeting.
9. Discuss Maintenance Area of the Golf Course with Respect to Staffing.
(Chairman Kaiser)
Chairman Kaiser said that at the last meeting the Board was concerned about Mark
Warren's ability to hire and retain people and requested additional input from him for
discussion.
John McNair said they had prepared an analysis and handed out copies of the survey
for review. Basically, the survey indicates that Encinitas Ranch is in line with other
comparable golf courses and private courses in the North County area. The difficulty
in hiring employees during the past year has been because there was not a labor pool
to choose from. Director Archibald asked what kind of benefits are being offered and
how comparable are they. Mr. Warren advised that Encinitas has a very good
medical plan and is comparable to other courses. Employees pay $17.50 per
paycheck ($35/month) for medical benefits. For family coverage it would be more
expensive; private courses would be less expensive to the employee for the fami Iy
plan.
Asked if he was now fully staffed, Mr. Warren responded that he currently has six
positions to fill and is using four men from the temporary service in the interim. He
does have a number of applicants who are already in training school but he is unable
to pay the $10 an hour that they are asking. In addition, landscaping companies are
paying $9-$11 an hour. His bottom line average, if he goes to an 18 or 20 person
crew, would be a little more than currently projected. Probably somewhere around
$8.75 or $9, whereas he had projected $8.50.
Chairman Kaiser explained that he had put the issue on the agenda because
Maintenance has always been spending less than had been budgeted, and that has
been a concern from the labor side. It's apparent from the survey that pay isn't really
the big issue, it's the labor pool. Mr. McNair confirmed that all the courses are
experiencing the same problem. In the last two months it has got a lot better but four
months ago all the courses were hurting. It is a seasonal problem and also with
construction and landscape businesses booming that has affected the labor market.
Director Archibald said that since all ERGA does is set the budget, if jC Resorts feels it
needs to increase the hourly rates then they should come back to the Board with a
recommendation. Mr. Warren indicated that at this point he does not feel that what
they are paying is the issue, to which Mr. McNair agreed.
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10. Potential Course Enhancements.
Chairman Kaiser said he would like to add a thought for future consideration. Some
time ago during a conversation with Mark Warren, Mark suggested that the pond at
hole #8 would be the ideal spot to put a very nice lit fountain. Chairman Kaiser said
he had to agree and felt it would be a wonderful improvement to the area. It would
be great for the City, the residents and the golf course. He didn't feel it would be too
expensive and would like to add it to a future agenda for discussion. He would also
encourage directors to drive by and take a look at the site before the discussion.
Director Archibald suggested that a fountain might also help with algae control.
Director Miller advised that he had to leave for an appointment but before he did he
had something to report under Manager's Reports. (see item 12)
(a)
Discussion of Letter from Robert McClendon.
(Rod Linville)
Chairman Kaiser said he will contact Mr. McClendon and arrange a meeting to review
the issues.
11. Discussion/Direction Concerning Course Operations, Conditions Needing Change.
Director Archibald advised that he is meeting with Ure Kretowicz of Cornerstone
regarding fencing along holes 2, 3 and 4. Whatever fencing and landscaping is
installed would be at Cornerstone's expense. Director Wigginton recommended that
a list of the issues be put together and then invite City's Community Development
Department's Advanced Planning Senior Planner, Gary Barberio, to the next meeting
to respond to the questions being raised about liability etc. on the trails. Director
Archibald explained that it is not ERGA's trail, it actually belongs to the City. The trail
is all on private property but it has a trail easement over it. Director Archibald asked
that an item be placed on the next agenda for" discussion on fencing along the trai I
on private property along holes 2, 3 and 4.
12. 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.]
Before he left the meeting Director Miller reported that at General Counsel Glenn
Sabine's advice, he needed to report on the Steven King issue. Mr. Sabine
recommended that the board appoint a sub-committee to investigate the charges
against Mr. King and make a determination as to whether the charges are founded or
unfounded. This recommendation comes following Glenn Sabine's conversation with
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the Kings. Directors Kaiser and Lamson agreed to do the investigation and report
back to the Board. Director Miller left at this point.
13. Next Meeting - Thursday, October 26, 2000 at 3:00 p.m.
14. Adjournment
Chairman Kaiser adjourned the meeting at 11 :30 a.m.
Respectfully submitted,
~:tc~,~ '4 R~v'
Patricia Drew, Board Secretary
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Edward Kaiser, Chairman
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