2000-11-09
RA~rCII
CITY OF ENCINITAS
ENCI N IT AS RANCH GOLF AUTHORITY
MINUTES OF SPECIAL MEETING
Carnation Room, Civic Center
505 South Vulcan Avenue
THURSDAY. November 9,2000 at 3:00 p.m.
CALL TO ORDER/ROLL CALL
Chairman Kaiser called the meeting to order at 3:05 p.m.
Directors Present:
Director Absent:
Also Present:
Edward Kaiser, Susan Lamson, Alan Archibald
Kerry Miller joined meeting at 3:09 p.m.
David Wigginton
John White, Carltas Co.; John McNair, Rod Linville, Mark Warren, JC
Resorts; Ray Paul, Senior Resident; David Balser, Golfer; Burton Swaim,
ER Men's Club JY1ember/Senior Citizen; David Tokoro, ER Men's Club;
Bob McClendon, Resident; Hal Boston, Resident; Phil Cotton, Supt. City's
Parks Dept.; Nancy Sullivan, Leslie Suelter, City's Finance Dept; Pat Drew,
Recording Secretary
ORAL COMMUNICATION [3 minutes for each speaker. Maximum 15 minutes for
oral communication.]
None
AGENDIZED BUSINESS ITEMS
1. Approve Minutes of Special Meeting of October 5, 2000.
Director Archibald moved approval of the October 5, 2000 minutes, seconded by
Chairman Kaiser. Approved 3-0-2 (Wigginton and Miller absent)
Taken out of Order
14. Discussion regarding Golf Course Rates, Charges and Operations Policies.
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Several citizens were present and requested time to speak to the agenda item. David Balser
led off by saying that they had had a public meeting on October 9, 2000 and at that meeting
they had decided to go to the ERGA board to express their concerns, in particular about the
golf course rates, and a number of other items that were of concern to the citizens. The
number one issue, however, is rates.
Director Miller joined the meeting at this point (3:09 p.m.).
Mr. Balser reviewed a list of questions he had brought from his meeting with the golfing
people. These included:
. Cost shifting of rates
. How does JC Resorts get paid.
. Is this a "public" or "municipal" golf course?
. Bond structure?
Are they tax-free municipals?
Total debt?
Debt Service?
Is debt service being paid?
Will bonds be refinanced?
. Can there be an "active" golfer on the ERGA Board?
. There are numerous situations between JC Resorts staff and the general public. How
can these issues be resolved so the "customers" feel they are being treated fairly?
Mr. Balser stated that in 1994 when the peQple voted for Prop K approving the
Encinitas Ranch development, they felt they were being promised extremely low golf
rates and benefits better than people other than residents of the City. The citizens
don't feel they are getting what they thought they were going to get. For the most part
they are getting some benefits, but most citizens feel the rates are not where they
want them to be, including discounts for seniors, and they are angry that jC Resorts
Club members get the same rate as the residents. The bottom line is that people want
lower rates. There was discussion as to whether this is a municipal or public golf
course. Because they voted on the proposition they feel this is a municipal golf
course. He noted that in Mr. Bond's recent campaign flyer he referred to it as a
municipal golf course.
Mr. Balser reviewed some schedules of current and proposed rates that he had
prepared together with some proposed cost shifting to give Encinitas residents better
rates, and asked the Board to consider them. His assumption is that if the rates were
changed as he is proposing the public participation may decrease by about 5%; the
residents' participation may increase by 10%; and jC Club memberships would
increase by 5% because people will see the benefit of being a member. Mr. Balser
handed out a sheet that summarized what would happen with the numbers with the
increase in participation and shift in rates.
Mr. White commented that in response to a statement by Mr. Balser, taxpayers are
not paying for this golf course. He felt that this concept would dramatically
increase the number of rounds and as a consequence this would have an increase in
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maintenance costs with a corresponding adverse affect on the greens. Mr. McNair
agreed and said that even now they are looking at possibly having to temporarily
close one of the holes for a couple of days because of over-play. He also noted that
he is not certain that the percentages are going to change as Mr. Balser is predicting
unless, of course, they all open at the same time - i.e. no two day advance tee time
reservations for residents. Right now they don't have a problem getting a tee time
but the public does. Mr. Linville noted that on a Saturday they can have anywhere
from 60 - 80 people on a waiting list. The nine-day tee time advance reservation is
a big benefit for the residents. They can pretty well be assured of a tee time when
they want it. This was one of the benefits that were considered when setting the
original rates.
Directors Archibald and Miller both asked Mr. Balser if the residents would be
happy with the proposed dollar difference between residents and JC Club of $2
during the week, $3 on Friday, and $2 at the weekend. He responded that it was
more the principle that they were concerned about. Of course, they would like to
have much lower rates but they know that is not reasonable.
Mr. Balser said that the other five items on his list of questions could be gone through
quite quickly.
. Who gets the JC Club membership Fee? Mr. McNair explained that from the $299
up to $29 of it goes to the golf course selling the membership and range balls. The
remainder goes to the golf course when they play their five coupon rounds of golf.
It does not go to JC Resorts.
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. How does jC Resorts get paid? Who gets the money from the driving range, pro shop,
lessons? Mr. McNair's response: All the money goes to the Encinitas Ranch Golf
Course. JC Resorts is paid a management fee; a base fee and also a bonus based
upon perforJTI~nc~. .J.-
fvI~ &1>~l s.+",1R.pL-fitrit
1\ People feel the golf course is overcrowded. Because of the eight minute tee times
starters have many players waiting at the first tee. May have as many as eight golf
carts waiting. People feel that the more people JC Resorts pushes onto the course the
more money they are going to make. Even though the course is run on a
managemerit fee at the end of the year there is a bonu's to be paid based on numbers.
Director Archibald responded that there is a cap on the bonus.
. Mr. Balser: If this were truly a municipal golf course, like a recreation facility, is it the
City's job to make a big profit off a recreational facility, as opposed to jC Resorts
which is in the business of making a profit? I know ERGA feels they have a great
responsibility to payoff the bonds but people feel that this is being run as a profit
making facility and they.see jC Resorts as making this big profit. I think people will
be comfortable knowing that they are on a management fee, but if this golf course
were paid for would ERGA be looking at it in a different light? Would this be another
recreational facility that we were promised in the Proposition?
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Director Miller said he could answer that question having managed a City that had
a municipal golf course. It would not be run as a recreational facility, it would be
run as an enterprise fund, which under governmental accounting it would basically
be a profit center. One would attempt to generate revenue above and beyond
expenses but that money would go back into the course for course improvements,
enhancements, etc. No, it would not be a break-even type proposition where we
would be making just enough money to cover administration and operation of the
course. We would be developing a capital fund to enhance the golf course. This is
essentially what we are doing now except that it is basically a privatization model as
opposed to a public model. Instead of the City being the operator of the golf course
we contract with a private provider. We do this with a number of City services.
Mr. Balser: I think people would be much happier if this were a municipal golf course
and we didn't have a big bond/debt service. But people feel as if the price
structure/rates are market driven.
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Director Archibald: When the structure of the finances was set up we had a bond
for the golf course and construction costs went over by about a million dollars. We
also have a bond for the road improvements around the golf course. The revenue .
from the golf course has to pay for both these bonds. ~ rcasen th~e-45 ill.s(;).-(l> tt:
-bond p~illgJor the roaas-1-s-- ooEatise the Eckes-tkdieated-the 17f; aC..f<Qs-et--lamJ...f-er- v 21,4- }oo
~. ..Qtherwise. we WOI.Id-J;wwe.- paid for toc J.and witl. a bOfKL_Eilh('r WClY-r We 1 yiJ
have approximately $14 million of debt for the construction of the golf course?
(approx. $10 million) plus the roads and a portion of Leucadia Boulevard (approx.
$4 million). The debt service is $948,000/year (for the golf course) and the course
is not currently earning enough reyel1ue to fully reimburse the CFD for the roads.
G(.~.J"'.(!/~ obi, ~ffv.. 111uftlapafL
It is not a .4ax fn~e....munidpaJ bond. It's a golf course revenue bond issued by The
Encinitas Ranch Golf Authority, a public entity, and owned by a single institutional
investor. The bonds were set up in such a manner to protect the City and taxpayers
so they are not at risk should the golf course fail. ERGA owns the land.
. Can there be an "active" golfer on the ERGA Board?
The citizens feel that the Board members of ERGA are not golfers. They would
like to see someone from the golf course be on the board, an active golfer and a
resident.
. Situations between jC Resorts staff and the General Public.
At the meeting numerous people raised issues about jC Resorts and the general
public; some people feel they are not being treated as customers. Each and every
issue was different and he didn't want to be involved in trying to resolve them.
People want to feel welcome when they walk into the clubhouse. Mr. Balser said
that he had personally always felt welcome and people knew him by name. An
example of the complaints would be that there have been occasions where people
have broken a rule and instead of staff dealing with the issue and saying this is
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resolved, they have fingers pointed at them saying "you're still the rule breaker."
People feel that they're not going to be a number one customer.
Mr. Linville stated that other than maybe the gentlemen at the meeting, no one
else has come to him with any problem issue. He is always available, no one has
ever been turned away. People are more than welcome to go in and talk about
any employee or a situation. For issues of customer service, he has had an all-
staff meeting and they reviewed customer service, watched videos, did training
and will continue to do that on a periodic basis. He also reminded the board that
there are over 200 residents of the City who are also JC Club members and who
appreciate being able to play at five courses.
Director Miller said he would like to summarize his understanding of what he is
hearing are the priorities. Basically, number one is the concern about the lack
of a rate differential between residents and JC Club non-resident members. This
is in large-part a matter of principle, not so much an economic issue. More than
anything it's the sense that the resident is not receiving some special recognition.
Secondly, it is having some kind of resident-golfer representation on the board
that would at least bring that voice to the table on an official type basis. Those
are the two issues that he takes from the meeting that are being raised as
representing the group's primary concerns. This is not including the customer
service issues which can be worked out. Mr. Balser agreed with the summary.
Burton Swaim said that his family moved to Encinitas in 1925 and he retired a
year ago so has time now to take up issues. His main concern is that seniors have
no recognition either in rates, discounts for lessons, etc. As a citizen, a senior, and
an active member of AARP, he asked the Board to consider the seniors. Maybe
there are times in some slow mornings when seniors could receive a rate break.
For him personally the key points are that something should be done about a
senior rate, both for lessons and tee times. Feels that any aware group should be
looking at services to seniors as a portion of their program.
Director Archibald commented that the Board had looked at senior rates during
the past three rate setting sessions and elected to defer it until such time as the
financial stability of the course is more known.
Dave Tokoro said that being a senior, he also would like to see some senior rates.
He believes there would be more participation in this group as a result.
Bob McClendon said that he had expressed his concerns about the course in a
letter and had had discussions with john McNair. He feels that john McNair now
has a handle on what he is/was concerned about.
Mr. Balser asked about ERGA's tournament policy.
directions from the Board.
Mr. Linville explained his
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Chairman Kaiser advised that he will put the issue of rate adjustments, senior
rates, tee times, jC Club on the next agenda and asked John McNair and Rod
Linville to come back with a few scenarios.
The Men's Club members and citizens left the meeting at 4: 1 0 p.m.
2. Report from the Investigating Sub-Committee on the Charges Against Andrew King.
(Directors Kaiser and Lamson)
Director Lamson reported that as the subcommittee she and Chairman Kaiser are
investigating the disciplinary action taken against Andrew King. What they would
like to do after meeting with Andrew and his parents, is to call a special meeting of
the board. The Secretary was asked to poll the directors to arrange a mutually
convenient time for a meeting.
3. Review Summary of September, 2000/Financial Statement; Summary of Capital
Reserve and Expenditures. (Rod Linville/John McNair)
Mr. Linville reviewed the financial results for September. Total revenue was
$380,273 compared to budget of $361,812 for 105% of budget. Expenses were
$233,761 compared to a budget of $227,398 or 103% of budget. Net income was
$143,620 compared to a budget of $132,130 or 109% of budget. Total rounds were
5,727 compared to a budget of 5,990 and came in at 96% of budget, due to aeration
and closing for one day to do striping on the parking lot, team building exercises,
some work in the pro shop and a lot of work out on the golf course. Year to date net
income is $595,098 compared to a budgeted amount of $484,280 for 123% of
budget. Rounds were 20,975 compared to a budget of 20,170 or 104% of budget.
3a.
New Golf Collateral.
Uohn McNair)
Mr. McNair passed around a copy of their new golf collateral brochure for directors to
view. He advised that their web site is changing as well. His goal is that by the end
of February to have an interactive web site for tee times so players can actually book
on line.
4.
Replacement Plants for Brome Grass.
(Mark Warren/john McNair)
Director Archibald was asked to serve on a subcommittee with Mark Warren and
Director Wigginton and bring back to the next Board meeting for approval of the
expense.
5.
14th Tee Update.
(Mark Warren/John McNair)
Mr. Warren reported that everything is going well although it is not completed yet.
He has about 4000 sq.ft. of sod still to lay, some hydro-seeding of the native plants to
tie in at the roadway, and additional plantings on the slopes. He expects to get this
completed within the next two weeks. Irrigation is complete as are the coverage tests.
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Mr. Linville said he is starting surveys again to see how many people shoot to the 15th
tee. In the previous survey they know that about 6% of the golfers were going up to
hole #15 with their tee shots.
Mr. Cotton advised that the $35,000 check due from Cornerstone has been received
and deposited.
6. Authorize Mark Warren to submit a landscaping plan for Hole 14 and slope area to
the City's Planning Department. (Ed Kaiser/ john Nabors)
Mr. Cotton said that they had an abbreviated design review with the Planning
Department. They said "go" and Mark should be able to do what they require
without hiring a landscape architect. Planning can then close out the books on the
Issue.
7.
Status of Entrance Monument.
(Alan Archibald)
Director Archibald said he has received no word back from Ure Kretowicz of
Cornerstone. Also, he is waiting to hear if Mr. Kretowicz has connections to get the
Torrey Pines for the slopes along Quail Garden Drive.
8.
Quail Gardens Drive Bridge Update.
(Bridge Sub Committee)
Director Lamson said that john Nabors had submitted the application forthe bridge
permit to the City. She had also received a call from jim Gay of Hazard who said that
it was looking lik~ the additional fee for the added expansion on the structural support
would be about $1200-$1500. The base price is $322,000 plus this additional
amount.
Chairman Kaiser asked if the Board should set aside some capital reserve now and do
they need to talk about borrowing the money from the City. (see item 10)
Taken out of order.
10. Impact of Bridge Loan Payments on Revenue Flow of Golf Course.
(Nancy Sullivan/Leslie Suelter)
Ms. Sullivan said she had prepared a cash flow showing what would happen to the
bond if there was a bridge loan. Ms. Suelter said they wanted the Board to know that
the revenue generated off the course is sufficient to pay back the City's $250,000 per
the agreement that had been worked out.
Discuss decision on financing at the next Board meeting.
9.
Review and Approve Amended Bylaws.
(reviewed and approved by General Counsel Sabine)
(Chairman Kaiser)
(
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Director Miller moved approval of the amended Bylaws, seconded by Chairman
Kaiser. Approved 4-0-1 (Wigginton absent)
Director Lamson said she had some small changes to make to the Bylaws which she
will give to the Secretary.
11.
Incidents and Accidents.
(Rod Linville)
Mr. Linville reported that about a week previously another ball from hole 9 hit a car
turn signal light.
12.
Discussion of Safety Fencing at Holes 2, 3,4 and 13; Trail Usage.
(Ph i I Cotton)
Mr. Cotton advised that during the last Board meeting there was discussion about the
installation of safety fencing along the trail at hole 13. During that discussion there
was some concern that the trail is posted for equestrian usage. The Board requested
that the City consider restricting equestrian use of City trails in the vicinity of holes #2,
3,4 and 13 on the Ranch golf course.
Mr. Cotton distributed a copy of his analysis and said he has thoroughly reviewed the
parcel maps as to who owns specific property where trails are located adjacent to the
golf course. The trail at hole 13 is a native dirt trail which runs from Quail Gardens
Drive extending eastward in front of the back tee at hole 13. It runs up to the east
bluff and to the back of the OMWD water tank. Authorized use at this time includes
pedestrians, non-motorized bikes, horses and City maintenance and emergency
vehicles. The trail is located and dedicated open space and is on ERGA property. It is
not a trai I easement, it is a trai I in the open space.
The proposed trail that Cornerstone will install is from the number 2 tee south down
around number 4. The proposed authorized use at this time would be pedestrians,
non-motorized bikes, horses and City maintenance and emergency vehicles. The trail
wi II be located at a publ ic trai I easement but is on private property owned by
Cornerstone Communities.
The Encinitas Ranch Specific Plan provided for all of the trails. Two key issues in the
plan are that it was supposed to be a network that took people from one point to
another - it was a design system. There were planned combination pathways and
trails in the area and it was known they were going to be next to the golf course. Also
in the Specific Plan it was addressed that the trails to the golf course should be
designed to be compatible with the golf course and sited such that they not require
tall fences. Current City policy only prohibits the use of motorized vehicles and
motorized bicycles on City trails. However, the City reserves the right to restrict
specific use on certain trail segments to avoid environmental degradation, conflicts
with property adjacent to the trail, or trail users" Based on the current City policy, the
Specific Plan and the Board's concerns for trail users' safety it would be appropriate
for ERGA to request a restriction on the trail in the vicinity of hole 13 as well as 2, 3
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13.
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and 4. A possible restriction that the Board may wish to consider is to prohibit
equestrian use on those trails.
Director Archibald reviewed a map on which he had plotted the safety zones as
prescribed by the American Society of Golf Course Architects. He pointed out the
trails that are within the safety zone of the golf course and to protect trail users they
will need to be fenced. He had consulted with ERGA's General Counsel, Glenn
Sabine, about security fencing to keep people on the trails from walking onto the golf
course. He advised that as long as the trail is signed in appropriate places along the
trail restricting the use of the trail and prohibited people from leaving the trail and
going onto the golf course, then we didn't need to have a continuous fence.
Cornerstone will be erecting the fence.
Mr. Cotton said his recommendation is for the Board to ask staff to prepare a written
request to the City from ERGA requesting that trails in the vicinity of holes 2, 3, 4 and
13 be posted to prohibit equestrian use. He will write the request if directed so to
do.
Director Miller suggested that the recommendation be represented by ERGA at the
Trails Workshop meeting the following week and to raise the issue with the Planning
staff at a public forum so as to put people on notice.
Director Miller moved approval of the staff recommendation, seconded by Director
Archibald. Approved 4-0-1 (Wigginton)
Drainage and Trail Easement Along Holes 2, 3 and 4.
(Alan Archibald)
Director Archibald said he had put this item on the agenda because it is related to the
same issue as item 12. Cornerstone developed a plan so that when the trail is built
there would be a 10ft. private storm drain easement within the golf course. City has
worked with them to come up with a better deal whereby rather than having a 10ft.
easement ERGA would give them a 2 ft. easement and they would move the storm
drain to the west and out of the golf course but still low enough to serve the golf
course drainage. They will have to move the temporary water line that is in there,
and when they depress the trail they will have to adjust the storm drain. There are
two reasons for moving the storm drain into the easement area: 1) it would be on their
property and since it is a private drain they would be maintaining it on their property.
The fence would be between the golf course and the storm drain so that anyone doing
maintenance on the drain would be protected by the fence. Also, they won't tear up
the golf course while they are doing it. 2) We have to move the irrigation lines back
off Cornerstone's property to the edge of the golf course so that then they can go
forward with the temporary water line, the storm drain and the trail construction.
What is intended is to minimize the impact on the golf course. Director Archibald
recommended that the Board substitute a 2 ft. easement for the 10ft. easement, and
go forward with the irrigation line relocation.
Director Miller left the meeting at 5 p.m. to go to another meeting.
9
Director Archibald moved that the Board approve a two foot easement on the golf
course in lieu of the ten foot easement that was previously authorized and signed,
seconded by Chairman Kaiser. Approved 3-0-2
Chairman Kaiser moved that the Board allocate up to $15,000 from the capital
reserve fund to do the project, seconded by Director Archibald. Approved 3-0-2
(Wigginton and Miller absent).
15. Capital Improvement Issues/Discussion:
(a) Restrooms; Prel iminary Design/Sewer Line for Restrooms at the south end of
the golf course.
Issue for discussion at next meeting. Mr. Linville said they had relocated the
temporary toilets between holes 13 and 14 to hole 15 to get them off the path.
(b) Club House
Discuss at next meeting.
(c) Fountain in Pond at Hole 8.
Mark Warren said he had obtained three quotations (but only had two with
him). The biggest issue was meeting with the County relative to the reclaimed
water in the pond. Drift and location was a big concern of the County. No
drift can reach maintained turf.
So his requirement was that the fountain needs to be mobile so that it can go
into a portion of the lake, possibly the north-west corner, where the prevailing
winds would not bring the drift to hole number 8. His second requirement
was that we go with the largest drop in size as possible to reduce any drift in
wind and spray.
Mr. Warren described the two proposals that he had and explained the
differences between the fountains.
Both of the proposals meet the County's requirements, but he bel ieves the one
from California Turf would better meet the requirements re drift. Chairman
Kaiser requested pictures for the next meeting.
(d) Other
No additions.
Bring items to next meeting.
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16. Potential Course Enhancements.
Mr. Linville said he has a proposal to change the fleet of carts one year earlier than
what the lease calls for. He was authorized to bring the request to the next meeting.
17. Discussion/Direction Concerning Course Operations, Conditions Needing Change.
Nothing for discussion.
18. 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.
19. Next Meeting - Thursday, December 14, at 3:00 p.m.
20. Adjournment.
Chairman Kaiser adjourned the meeting at 5: 15 p.m.
Respectfully submitted,
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Edward Kaiser
Chairman of the Board
Patricia Drew
Board Secretary
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