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Home My WebLink About05/29/2003, PH5 - LAGUNA LAKE GOLF COURSE FUND RATE REVIEW C council M..:"Da. May 29,2003 j acEnoA Report " CITY OF SAN LUIS OBISPO FROM: @ Paul LeSage, Director of Parks and Recreation SUBJECT: LAGUNA LAKE GOLF COURSE FUND RATE REVIEW CAO RECOMMENDATION 1. Review and accept the 2003 Laguna Lake Golf Course fund rate review; and 2. As recommended by the Parks and Recreation Commission, adopt a resolution setting fees for Laguna Lake Golf Course effective.July 1,2003; and 3. Authorize a General Fund transfer of$ 237,300 in 2003-04 for general government costs and capital improvements. DISCUSSION Background On April 15, 2003, the Council thoroughly reviewed the status of the golf course and provided staff with direction to take several steps to improve rounds played and the fund's overall fiscal health. The purpose of this report is to focus on just one part of the overall strategy: fees. The proposed resolution (Attachment 1) does not increase fees for the Laguna Lake Golf Course (LLGC). With a strategy of increasing golf revenue by attracting more golfers, fees should not be raised. The modest increase in revenue that is projected in the fund is based on additional rounds of golf being played. Two promotional fees that have been tried on a pilot basis are recommended for inclusion in the rate structure. A $4.25 rate on all green fees for a second nine holes has been in effect for most of the year. Staff reports that 15-20 people a day play 18 holes. Given the special rates offered at other courses, many.of those people might play elsewhere without the discounted second nine holes. For the past three months, a$4 per round rate has been offered for twilight rounds, played after 3:00pm. This is a common practice at most golf courses and lately, about 25 golfers per day are playing during the twilight period. This is a three-fold increase from previous years. Rate Review Objectives: The objective of the Rate Review is to establish a fee schedule that maximizes revenue and will accomplish the following: 9 Ensure continued operation of the course. Council Agenda Report i;aguna Lake Golf Course Fund Rate Review 2003 Page 2 • Create an opportunity for more residents to enjoy golf. • Generate sufficient revenue to cover direct operating expenses. The key element of the 2003-04 rate structure is keeping the same basic rate structure, and adding two successful special rates to the approved fees. The rates should increase rounds played and course income. LAGUNA LAKE GOLF COURSE FEES Proposed rate-----F- 2 I 9-holes Senior/Youth/Student Weekdays: $6.25 $4.25 General Weekdays: $8.25 $4.25 Senior/Youth/Student Weekends: $7.00 $4.25 General Weekends: $9.00 $4.25 Senior/Youth/Student 10-Play Card: $57.50 General 10-Play Card: $67.50 Twilight Rate: $4.00 The rates will not exclude players and will help to reduce the expenditure/revenue gap. CONCURRENCES The Parks and Recreation Commission recommended at their May 7, 2003 (Attachment 2) meeting, the following: ■ Not raise Laguna Lake Golf Course Fees for the 2003-04 Fiscal Year. ■ Approve a discount on all green fees for a second nine holes played. ■ Approve a twilight rate of$4 per round. FISCAL IMPACT Changes in working capital. The requested transfer of $237,300 from the General Fund represents an $8,500 decrease from last year (highlighted in Attachment 3). Reducing operating expenditures and holding the line on capital improvements accomplished this. However, the increases experienced Citywide in Retirement and Workers Compensation costs offset what would have been a more significant reduction. The specific recommended reductions in expenses in the Golf Fund are: Capital Improvement Plan Reductions $ 32,500 Rental of portable facilities $ 800 Salary savings $ 8,200 Water conservation $ 6,000 Operating Materials $ 5,900 $53,900 Efforts to increase revenue. To add youth players, a pilot program with the First Tee organization will be started this fall. First Tee is a World Golf Fund and United States Golf G:LRa WISe Ugrada Prep Fil=ICAR-05.:9.03 LLGC R C R"im 2003 v3.DOC 5�C7C 1 � Council Agenda Report-Laguna Lake Golf Course Fund Rate Keview 2003 Page 3 Association initiative designed to introduce golf and life skills to young people. It operates as a non-profit organization, with a local advisory board. Through golf, young people learn individual responsibility, integrity, respect, and gain self-confidence. The Parks and Recreation Commission reviewed this program at their May 7, 2003 meeting and endorsed the concept. The program will start with a lessons program two days a week that runs for most of the school year. If it proves successful, a more formal long-term agreement will be developed. To promote the LLGC, an open house is scheduled for late June. This is designed to reacquaint the community with a valuable recreation resource. Staff has also arranged with three local radio stations to trade complementary golf rounds for advertising. Golf Supervisor Todd Bunte has instituted a customer service-training program at all staff meetings. A contract to expand food service is also being pursued. ATTACHMENTS 1. Resolution 2. Parks and Recreation Commission draft Minutes of May 7,2003. 3. Changes in Working Capital G:&af/Wbk Ugenda Prep FdaICAR-03.:9.03 LLGC Rate Rewm 1003 v3.DOC S- l RESOLUTION NO. (2003 Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO SETTING THE FEE STRUCTURE FOR THE LAGUNA LAKE GOLF COURSE AND RESCINDING RESOLUTION NO. 9316 (2002 Series) WHEREAS, it is the policy of the City of San Luis Obispo to review program fees on an ongoing basis; and WHEREAS, those fees are adjusted as required to ensure they remain equitable and adequate to cover the cost of providing services; and WHEREAS, a comprehensive analysis of the Golf Course Fund was performed for fiscal year 2003-04. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of San Luis Obispo as follows: SECTION 1. Resolution No. 9316 (2002 Series) is hereby rescinded; effective July 1, 2003. SECTION 2. The following green fees shall be as follows, effective July 1, 2003: LAGUNA LAKE GOLF COURSE FEES Proposed rate 2°d 9-holes Senior/Youth/Student Weekdays: $6.25 $4.25 General Weekdays: $8.25 $4.25 Senior/Youth/Student Weekends: $7.00 $4.25 General Weekends: $9.00 $4.25 Senior/Youth/Student 10-Play Card: $57.50 General 10-Play Card: $67.50 Twilight Rate: $4.00 SECTION 3. The fees for the driving range, wholesale goods, lessons, and other special activities and promotions shall be set by the Director of Parks and Recreation and the Golf Course Supervisor. Upon motion of seconded by and on the following roll call vote: GASUOKiserlABenda Prep MesMaahspofRemlarian-LLGC 2003.dor S^�� ATfACHMENTJ� AYES: NOES: ABSENT: the foregoing resolution was adopted this day of , 2003. Mayor Dave Romero ATTEST: Lee Price, City Clerk APPROVED AS TO FORM: 0 on Lowell, City Attorney GACowkll Agemla Repom Ruolwion-LLGC 2003.DGC ATTACHMENT Parks and Recreation Commission MINUTES A City-County Library Conference Room "�\u Wednesday,May 7 2003 7:00 .m. CALL TO ORDER: Chair Peter Dunan called the meeting to order at 7:00 p.m. O ROLL CALL: Chair Pete Dunan, Commissioners Debbie Black, Daniel Buckshi, Gary Clay, Jim Neville,Bill Pyper, and Alan Thomas. STAFF: Director Paul LeSage, Larry Tolson, Nicole Adler, and Cindy McDonald also attending Council Member Christine Mulholland. PUBLIC COMMENT PERIOD: There was no public comment. CONSIDERATION OF MINUTES: The minutes of the April 2, 2003 were approved with the spelling correction for Garth Koreich. 1. Volunteer of the Month Chair Dunan presented Matt Nguyen as the Volunteer of the Month. 1. First Tee Golf—Scott Westlotorn,The First Tee Central Coast Paul LeSage introduced Scott Westlotom. Mr. Westlotom briefed the not-for-profit First Tee Program to the Commission. Mr. Westlotom described that First Tee is not a competitive sport but more of a recreation sport and that the age group is for children 7— 17 years old. He explained that each chapter receives 50 sets of golf clubs and 500 golf balls. Mr. Westlotom answered questions from the Commissioners. Commission thanked Mr. Westlotom for his presentation of First Tee. Recommendation: Endorse the First Tee Golf Program as a Pilot Program with the Parks and Recreation Department. (PyperBuckshi, unanimous). 2. Adobe Preservation—Betsy Kiser,Principal Analyst Betsy Kiser, Principal Analyst presented the City's Adobe Preservation Plan to the Commission. She explained the City's role and the Friends of Las Casas de Adobe role in the preservation of the adobes. She explained the care n re C ers thanked Ms. Kiser for her 3. Laguna Lake Golf Course Rate Review LeSage briefed the Commission on the Laguna Lake Golf Course Rate Review that will go before City Council on May 29,2003. Commissioners discussed the issue. Recommendation: • Not raise Laguna Lake Golf Course Fees for the 2003-04 Fiscal Year. • Approve a discount on all green fees for a second nine holes. • Approve a twilight rate of$4.00 per round. (PyperBlack: unanimous) /'IPaHa&ReC C0MM&5Wj20031M1hUtj05.08.03 Minu[adx ��LP ATTACHMENT 3 CHANGESPOSITION GOLF FUND 2001-02 2002-03 2003-04 2004-05 ACTUAL BUDGETED BUDGET BUDGET Revenues Service Charges Retail Sales 9,200 12,000 12,400 12,800 Green Fees 223,700 249,000 256,500 264,200 Other Fees 38,100 24,700 25,400 26,200 Total Service Charges 271,000 285,700 294,300 303,200 Other Revenues Investment and Property Revenues 1,600 1,000 1,000 1,000 Total Revenues 272,600 286,700 295,300 304,200 Expenditures Operating Programs Leisure,Cultural&Social Services 368,100 365,800 394,200 408,800 General Government 113,700 117,100 120,600 129,000_ Total Operating Programs 481,800 482,900 514,800 537,800 Capital Improvement Plan Projects 85,500 12,000 Total.Expenditures 481,800 568,400 526,800 537,800 Other Sources(Uses) Operating Transfers In 221,700 245,800 237,300 239,600 Potential MOA Adjustments 0 (4,600) (5,800) (6,000) Total Other Sources(Uses) 221,700 241,200 231,500 233,600 Revenues and Other Sources Over(under) Expenditures and Other Uses 12,500 (40,500) 0 0 Working Capital,Beginning of Year 28,000 40,500 0 0 Working Capital,End of Year $40,500 $0 $0 $0 �� I