HomeMy WebLinkAbout06/11/2009, PH1 - LAGUNA LAKE GOLF COURSE FUND RATE REVIEW council M�t6,D°
6-II-09
j ac Enda RepoRt I N.6n
CITY OF SAN LUIS OBI SPO
FROM: Betsy Kiser, Parks & Recreation Director
Linda Fitzgerald, Recreation Manager
SUBJECT: LAGUNA LAKE GOLF COURSE FUND RATE REVIEW
RECOMMENDATION
As recommended by the Parks&Recreation Commission:
1. Review and discuss the 2008-09 annual golf fund financial and rate review.
2. Adopt a resolution implementing improved cost recovery by increasing green fees by$2.00
per round in 2009-10 and by $1.00 per round in 2010-11; and authorizing the Golf Course
Supervisor to increase the cost of food and merchandise items by 10% and rental charges by
$1.00 per use in 2009-10.
3. Conceptually approve the Golf Fund budget for 2009-11, with final action on June 16, 2009
with adoption of the 2009-11 Financial Plan.
REPORT-IN-BRIEF
1
Annually, the Golf Fund is brought before the Council to review the previous year's activity at
Laguna Lake Golf Course (LLGC); make projections for the next four years; present any capital
improvement plan (CIP) projects for approval;evaluate revenue requirements for the operation of .
the golf course;and if needed, consider rate increases. Staff has evaluated the practices at LLGC
and looked at similar practices in benchmark cities and golf courses within the county to compare
operations, use fees and site amenities. The following is a summary of key findings and
recommendations from this year's rate review:
1. Rounds Played Are Up from Projections — After experiencing a decrease of 11.5% in
rounds played during 2007-08, golf play was projected to increase 3% this fiscal year. Based
on year-to-date results, staff is now projecting a 5.2% increase in rounds played, 2.2% higher
than originally estimated. Although not as high as 2006-07, the projected rounds are aligned
with the median (42,000) for a four year period.
2. CIP Request: •Mower Replacement - Staff is requesting the replacement of a Toro
Sidewinder mower, used to groom tees and aprons and also serve as a backup fairway mower
(Attachment 2: Excerpt from the 2009-13 CIP). The mower has reached its useful life and
has served two years beyond the target replacement cycle. The cost to replace the mower is
$25,600 and would occur in 2009-10., There may be a cost savings as LLGC receives
discounts up to 20% on Toro equipment for hosting a First Tee youth golf program.
Laguna Lake Golf Course Fund Rate Review Page 2
3. Proposed Rate Increase—At last year's rate review, a modest increase of 25 cents per round
was proposed over a four year period. With General Fund resources becoming tighter, steps
were needed to make the golf program meet the budget policy goal of recovering its direct
operating costs with revenues. A $2.00 per round increase for 2009-10 is being
recommended along with authorizing the Golf Course Supervisor to increase the cost of food
and merchandise items by 10% and rental fees by $1.00 per use. An additional increase of
$1.00 per round in 2010-11 is also recommended, which should bring the Golf program near
its goal of direct cost recovery.
4. General Fund Support — General Fund support for 2008-09 will be needed to cover a
portion of the direct operating costs along with subsidizing the general government costs and
CIP projects associated with the golf course operations. The mid -year budget review
estimated a subsidy of$316,500 for 2008-09; staff projections for the end of the year project
the subsidy at $293,900. Projections for 2009-10 at last year's rate review were $309,300;
staff is anticipating a$283,700 subsidy for 2009-10 and $207,200 for 2010-11.
In summary, the General Fund subsidy has varied from year to year largely because of CIP
projects, which have been fully funded by the General Fund. However, LLGC has performed
consistently over the years in terms of rounds played and revenues generated. It is staff's
conclusion that given the lack of a full-sized driving range, restaurant and bar facilities, the golf
course is performing as well and as efficiently as it can perform.
While some options exist for the generation of minor new revenues (and these will be researched
further), significant revenue potential at this time is limited to increasing green fees, which in
itself is restricted by how much the market will bear before the cost becomes prohibitive for our
customers. As we have experienced in the past, rate increases can result in lower overall
revenues if rounds played decrease by more than the rate increase. We believe that the proposed
rate increases will result in a modest decrease in rounds played (12%), which is reflected in our
revenue projections. However, given market conditions, we believe that revenue increases
beyond those recommended have the potential to result in overall lower revenues.
So the question before Council really becomes one of. "Does the City want to be in the golf
business?" If so, then a General Fund subsidy for at least indirect costs for support services like
payroll, accounting, human resources, insurance, information technology, vehicle maintenance
and department administration (general government) and CIP projects is a reasonable expectation
for years to come. For the same reasons, this was also the conclusion of a comprehensive analysis
presented to the Council in 2003. If not, alternatives ranging from partial to full lease to closure
of the course have been provided for Council's consideration.
DISCUSSION
History of Laguna Lake Golf Course
Ray Skinner, a developer of property around the Laguna Lake area, constructed LLGC in 1964.
The golf course was operated as a private business for a short time and closed in 1965. In 1967,
the golf course was leased by a private party from the owner - a credit union - and operated for
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Laguna Lake Golf Course Fund Rate Review Page 3
seven years. In both cases, the golf course was not able to generate sufficient revenue to make it
profitable.
In 1974, based upon the recommendation of a citizens' committee, the City began leasing the
golf course and in 1978, purchased the site. The committee also recommended that an adjoining
2.7-acre parcel be purchased for a driving range, noting that driving ranges are an important
source of income for profitable golf courses. Unfortunately, that purchase was not made;
however, in 1979 the 1.5 acre parcel where the driving range and maintenance shop currently are
located was purchased with grant funds for the sole purpose of creating a driving range.
From 1974 to the early 1980's, the City contracted with a private firm to operate the golf course.
At that time, the City directly took over operations and designated the golf course an enterprise
fund, with the goal of generating sufficient revenues to cover all costs. In 1980, the Council
considered other uses for the site, but ultimately decided to leave the site as a golf course. The
problem at that time, as now, was lack of revenue.
For a brief, two-year period from 1991 to 1993, the golf course was operated as a General Fund
program. The golf course program returned to its current enterprise fund status in 1993.
Course Profile
Today, LLGC is an executive length golf facility owned and operated by the City and located
within City limits. The course consists of 10 playable holes, a club house, a small driving range,
a barbecue area, a putting green, a maintenance shop and eight electric golf carts. Open 364 days
a year, the mission of the LLGC is to offer a high quality playing experience to a broad cross-
section of the community at a competitive price.
LLGC is managed by a Golf Course Supervisor, who oversees two full-time maintenance
workers, 10 part-time staff who work at the clubhouse, and several volunteers who serve as
course marshals, weekend custodians, driving range ball retrievers, and when needed, perform
other related functions. Staff maintains the course seven days a week to sustain an optimum level
of play and responses from patrons bring high'praise on the excellent condition of the elevated
greens, customer service, and the physical and mental challenges presented by the course.
Pro shop operations are basic and include:
1. Scheduling and starting tee times
2. Collecting green and driving range fees
3. Selling clothing, pre-packaged food and bottled drinks
4. Renting electric golf carts, push carts, and golf clubs
5. Repairing golf clubs
A part-time golf pro teaches lessons on a contract basis and oversees the First Tee program, a
youth golf program designed to develop character and life-enhancing values for children ages 5
to 17 years old.
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LLGC serves a cross-section of the community; however because of its playability and
affordability, 47% of the 42,000 rounds played this year(and typical of previous years) have been
by seniors, students and youth. Only
about 20% of the rounds are played at 2007-08 Rounds Played
regular rates.
Of the seniors, many are over the age of °other ❑Youth
80 and several are in their 90's. The o 70%
senior men's and ladies' clubs meet °Regular
ht
weekly at the course, as do the residents °T24% 19%
of The Village at the Palms assisted
living facility; the Retired Active Men's
Club;, The Newcomers' group; members ❑student °senior
of Altrusa Women's Club; and various 10% 30%
church groups (although the latter three
groups are not necessarily seniors).
During weekends and twilight play (3:00 p.m. to closing), the course is frequented by tourists,
families and college age golfers. Additionally; the course is used by the First Tee youth program,
by Cal Poly for two quarters each spring for golf classes, and rented by organizations throughout
the year for fundraising tournaments.
Recent Golf Course Enhancements
From the opening of the golf course in 1965 until the early 1980's, the condition of LLGC
deteriorated due to inadequate or deferred maintenance. This was understandable, especially
considering the inability of the golf course to generate adequate revenue to cover even basic
direct costs, let alone capital improvements. The lack of maintenance translated to a drop-off in
play, which in turn translated to lack of funds for proper maintenance. As a result, when the City
finally assumed operation responsibilities for the course, enhanced maintenance became a
priority for staff and it took a 20-year sustained effort to get the golf course back into a healthy,
attractive, playable condition.
Unfortunately, due to an economic downturn, during the four years prior to 2006, LLGC received
little in the way of capital improvements, resulting in a series of infrastructure and equipment
failures that required immediate attention and substantial funding to remedy. Significant
allocations between 2006 and 2009 allowed staff to complete a number of critical infrastructure
improvements that enhanced considerably both the operations and playability of the course.
However, they also increased the General Fund subsidy to the Golf Fund. These projects
included the following:
1. Hole #3 Reconstruction: In July 2008, the reconfigured Hole #3 was opened after 18
months of construction and turf growth. The new hole features the only sand trap at the golf
course and the design effectively eliminated errant balls from entering the adjacent
neighborhood.
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2. Adding a 10th Hole: While Hole #3 was closed for reconstruction, staff built a temporary
fairway and green in order to offer the traditional 9 holes of play. Once Hole #3 was
reopened, staff chose to maintain the temporary hole to allow for an easier transition between
Hole #5 and Hole #6. The additional hole was put into play on April 1 and initial responses
have been favorable.
3. Hole#6 Bridge Replacement: After six years of planning, the bridge replacement at Hole
#6 was completed in 2009. To the satisfaction of the patrons, the course's signature hole was
restored to its original configuration and put into play on April 1 (which is now Hole #7
because of the addition of a I oth hole mentioned above.)
4. Barrier Netting Replacement along Hole #S Winter storms in 2008 caused two barrier
netting poles to collapse along Hole #5. These poles hold the barrier netting that protects
nearby residences from errant-balls. The 30-foot high galvanized poles were rusted and
eroding at ground level and the netting, which was on year-20 of a 15-year lifecycle, had been
mended numerous times by staff to keep it functional. Work was completed in July 2009 to
install 40' high wood poles and new netting along the fairway.
5. Irrigation Control System Improvements: With the installation of new satellites throughout
the course, the irrigation system is now controlled by a wireless central controller. The
system permits the Golf Course Supervisor to program and operate irrigation functions
remotely rather than manually, which'allows more efficient use of water and more effective
management of staff time.
6. Equipment Replacements: Three new greens mowers and a verticutter (a vertical mowing
machine used to cut furrows into the soil surface to provide a place for seed to settle when
sown) have been replaced in the past two years. The previous equipment was over 12 years
old. In the past three years, the golf course also received a new fairway mower, two
Cushman maintenance carts and is scheduled to replace the second fairway mower in 2009-
10.
In order to keep ongoing operating costs to a minimum, staff recently purchased a reel
sharpener/grinder for the mowers. In the past, an outside contractor completed the reel
sharpening for an annual cost of $2,500. Using carryover savings from 2007-08, staff
purchased the equipment at a cost of$2,000. By performing the work internally, staff is able
to save the annual cost of the contract and keep the reels sharpened more frequently, which
reduces the cost to remedy turf stress and disease caused by dull reels.
7. Inventory ControMint of Sale/Online Tee-Times Software Purchase: Staff recently
purchased a software system from Fore Reservations to track point of sale purchases at the
golf course, allow for better inventory control of food and merchandise, establish an online
presence so customers can make tee-time reservations 24/7, and provide the course with
enhanced marketing opportunities. The system allows staff to monitor peak and off-peak
uses, evaluate ways to get more use at LLGC, market the course through emails, and monitor
frequent users.
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With these major CIP projects complete, most of the crucial and/or emergency capital
improvements have been made to the course. Barring unforeseen emergencies, the next four
years show the completion of several previously programmed projects and only a minor
investment in new infrastructure and/or new equipment. Although the pro shop restrooms are in
need of replacement and the pro shop itself needs renovation or replacement, neither of these CIP
projects are scheduled within the Preliminary 2009-11 Financial Plan.
Rate Review Objectives
The Budget and Fiscal Policy for Enterprise Fund Fees and Rates pertaining to the Golf Fund
specifically states:
"Golf program fees and rates should fully cover direct operating costs. Because
of the nine-hole nature of the golf course and with its focus on youth and seniors,
subsidies from the General Fund to cover indirect costs and capital improvements
may be considered by the Council as a part of the Financial Plan process, along
with the need to possibly subsidize direct operating costs as well. "
Additionally, because the golf course program is also a recreation program, cost recovery goals
for seniors and youth apply. The City's Budget and Fiscal Policy for Recreation Programs states:
"Cost recovery for activities directed to youth and seniors should be relatively
low. In those circumstances where services are similar to those provided in the
private sector, cost recovery levels should be higher.
Although ability to pay may not be a concern for all youth and senior
participants, these are desired program activities, and the cost of determining
need may be greater than the cost of providing a uniform service fee structure to
all participants. Further, there is a community-wide benefit in encouraging high-
levels of participation in youth and senior recreation activities regardless of
financial status. "
It is, therefore, the intent of the rate review to establish a fee schedule that maximizes revenue to
cover direct operating expenses and ensure the continued operation of a safe, attractive and
reasonably priced golf course with an emphasis on senior and youth services.
Golf Direct Cost Recovery Compared with Other Recreation Programs
Due in large part to the emphasis on serving seniors and youth (and to limitations on revenue
potential as discussed later in this report), the LLGC has never achieved, in its forty-five year
history, full recovery of the direct operating costs of the course, let alone the indirect costs
associated with support services and CIP projects. LLGC has succeeded, however, in having the
highest direct cost recovery rate of all recreation programs associated with facilities that are
provided by the City.
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Laguna Lake Golf Course Fund Rate Review Page 7
To provide perspective on the direct cost recovery rate for the golf program versus other
recreation programs/facilities, a comparison was made of four City programs (Golf Course,
Aquatics, Damon-Garcia Sports Fields and Ludwick Community Center) and converted into the
General Fund subsidy per attendee. The programs were selected on the basis of direct operating
costs, maintenance and cost recovery, with 2007-08 used as a base year. Note: None of the
figures reflect costs attributed to support service costs and capital improvements.
Direct Cost and Cost er Attendee Com arisonforCityRecreation Facilities
Damon-Garcia Ludwick
Aquatics Sports Fields Community
Golf Course Operations ` Operations& Center
Operations and Swim Parks Operations&
and Center Maintenance Building
2007-08 Maintenance Maintenance Maintenance
Expenditures $463,300 $692,500 $267,500 $79,700
Revenues $363,200 $196,300 $16,700 $20,800
Subsidy $100,100 $496,200 $250,800 $58,900
Cost Recovery 78% 28% 6% 26%
Number of 40,200 108,300 80,600 15,400
Attendees/Year
General Fund Cost $2.49 $4.58 $3.11 $3.82
per Attendee
As reflected above, LGCC is the among the City's highest cost recovery programs. Per user, the
General Fund subsidy to the golf course for direct operating costs is also significantly less than
other recreation programs. That being said, it remains critical that the LLGC continue to work
toward full direct cost recovery goals.
Rate Review Assumptions
The Golf Fund rate review is based on a number of assumptions that look at projected rounds of
play, capital improvement projects, revenues, and operation efficiencies (see Attachment 1 for
Changes in Working Capital: Golf Course Fund). The following information details each:
1. Rounds Played '
a. FY 2008-09. After experiencing a decrease of 11:5% in rounds played during FY 2007-
08, golf play was projected to increase 3% this fiscal year. Based on year-to-date data,
staff is now projecting a 5.2% increase in rounds played for FY 2008-09, 2.2% higher
than originally estimated. Although not as high as 2006-07, the projected increase is
aligned with the median for a four year period.
The increase in rounds played is likely attributable to completion of construction work at
the golf course, fewer days lost due to inclement weather and affordability in tough fiscal
times. Staff anticipates that the addition of an Internet tee time system and opening a 10`h
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hole will have a positive impact on rounds played. However, both were added late in the
year and therefore require additional analysis to confirm the effects of each..
Annual Number o Rounds Pla ed at LLGC
Fiscal Year Rounds Played Percent Change
2004-05 40,700
2005-06 42,600 4.5%
2006-07 45,600 6.6%
2007-08 40,400 11.5%
2008-09 ( ro'ected) 42,700 5.2%
2009-10 (projected) 37,600 -12%
2010-11 (projected)_ 37,600 0%
b. FY 2009-10. As discussed in greater detail later in the report, staff is recommending an
increase to green fees to improve revenues. Based on past experience with green fee
increases, staff is projecting conservatively a 12% reduction in rounds played for FY
2009-10. Rounds are expected to finish at or above 37,600.
c. FY 2010-I1. Because of the recommended increase of$1.00 per round in FY 2010-11,
staff is projecting (again conservatively) that rounds will not see any significant increase
and will remain at the 37,600 level estimated for the previous year.
2. CIP Projects
a. FY 2008-09. As identified earlier, many capital projects were completed this fiscal year:
Hole 43 reconstruction, barrier netting replacement, irrigation control system
improvements, and installation of the bridge at Hole #6. The cost of those projects plus
the balance remaining in the completed projects account totals $130,600.
b. FY 2009-10. Projects previously programmed and still pending completion include
replacement of the pro shop roof($27,600), a contribution towards the corporation yard
fuel system ($5,700), and ongoing removal of Monterey Pines as they deteriorate due to
pine pitch canker ($7,800). These projects have been carried over as part of the Capital
Improvement Program for 2009-10 along with a fleet replacement for a mower ($25,600)
for a total capital project cost of$66,700.
c. FY 2010-11. Although the pro shop restrooms are in need of replacement and the pro
shop itself needs to be either renovated or replaced, no new capital projects are proposed
for the next four years.
3. Telecommunication Sites
a. FY 2008-09. Last year's rate review anticipated the addition of two cell site providers to
the telecommunications tower at golf course by the end of this fiscal year, with a
projected income of $86,200. Unfortunately, neither of these cell sites materialized for
Laguna Lake Golf Course Fund Rate Review Page 9
2008-09. In February 2009, ClearWire decided not to proceed with a cell site lease, citing
cost concerns; and while staff has developed an agreement with AT&T for their site,
efforts to complete that agreement are continuing. Payment for the AT&T site now is
expected the third or fourth quarter of 2009, not in time to be reflected in the 2008-09
revenues.
b. FY 2009-10. Additional revenue for the AT&T lease will be $26,000 in the first year
with increases by COLA in subsequent years. A $10,000 contribution for the pro shop
roof replacement is included in the first year payment as part of the agreement. Staff will
continue to pursue another provider for the remaining space on the cell tower.
4. Operating Budget Reductions
a. FY 2008-09. The golf course operates on a "shoestring" budget each year in an effort to
reduce the amount of General Fund subsidy towards direct operating costs. This year, the
Golf Course operating budget is anticipating approximately $27,800 in savings due to
reduced water and electric usage and cost of merchandise purchased for pro shop sales.
b. FY 2009-I1. The proposed golf course operating budget reflects the following budget
reductions for 2009-11:
Contract Labor Reduced allocation as number of lessons 1,000
taught at LLGC has dropped.
Contract Services Eliminated the reel grinding/sharpening 2,300
services for the mowers as staff has
purchased a reel grinder/sharpener to handle
the task themselves.
Equipment Maintenance Ongoing costs to maintain the golf carts 1,000
have been reduced as the leased power carts
require less maintenance and will be
re laced within the next 3 % ears.
Operating Materials & Fewer supplies needed 600
Supplies
Machinery& Equipment Minor capital equipment has been reduced 14,000
due to recent upgrades
Total Reductions $189900
5. Potential significant new revenue opportunities remain limited by the lack of a full-size
driving range, a full-service restaurant and bar, updated restrooms and enhanced pro shop
facilities. These limitations are discussed in greater detail below.
Laguna Lake Golf Course Fund Rate Review Page 10
Limitations on Significant Revenue Potential
Some marginal opportunities still exist at the LLGC to increase revenues; however, as has been
presented over the years in previous rate review and golf course status reports, it is evident that
the course lacks several key amenities that support sustainable golf course profitability. In
comparing LLGC to other public courses in the county these amenities include a full-size driving
range, restaurant/bar facilities, and enhanced pro shop facilities. Additionally, the
clubhouse/restroom facility is over 40 years old and is showing significant signs of wear. The
restrooms are not compliant with the Americans with Disabilities Act (ADA) standards and
eventually need to be replaced when adequate funding becomes available.
Staff visited other public golf courses in the County and compared site amenities with those
offered at LLGC (see Attachment 2 for comparison table). What staff found included the
following:
1. A full-size driving range is a key revenue source for golf courses because it allows the golfer
to see the flight of the ball and make adjustments,to the swing accordingly. Approximately
five (5) acres are needed for a full-size driving range. The driving range at LLGC is one (1)
acre and best used as a warm-up area before playing the course. According to the County's
golf superintendent, the County generates approximately $200,000 annually from each of its
driving ranges. LLGC's annual revenue from its driving range is about $15,000.
2. Many golf courses rely on a restaurant/bar to retain customers and supplement course
operating budgets. Efforts this year to find a vendor to provide a small restaurantibar at
LLGC proved unsuccessful: no bids were received by the City when a request for proposal
was distributed in September 2008. Staff attributes the lack of proposals to the fact that the
pro shop building requires significant upgrades in order for a business to prepare food on site,
such as triple sink, separate wash and slop sinks, coved seamless flooring, wall treatments
and seamless countertops. An interested vendor would have to make these improvements
and in this economic climate,this is unlikely.
That being said, staff recently approved a pilot program to have a vendor sell meals at the
golf course that are prepared offsite: The self-contained service will operate Thursday
through Saturday of each week through October 2009. This will hopefully give staff a sense
of how successful a food service operation can be at the course without a major capital
investment. Staff remains guardedly optimistic given the absence of alcohol sales but
appreciates the vendor's willingness to provide something other than pre-packaged food to
our customers.
3. LLGC's clubhouse building is over 40 .years old and is showing significant signs of
deterioration. The exterior of the building needs re-facing, the restrooms do not comply with
ADA standards and roof repairs are sorely needed as there are leaks during rain storms. At
one time, the clubhouse had a small snack bar but in order to bring in any kind of food
service vendor, significant improvements are needed. An enhanced clubhouse facility could
provide updated restrooms, a foodibeverage service area with banquet and/or outdoor seating
Laguna Lake Golf Course Fund Rate Review Page I I
and provide a larger facility for golf related merchandise. The expense would be considerable
to construct a new facility with new restrooms.
Closing the Gap
Given Budget and Fiscal Policies, in combination with the existing financial climate, it becomes
more critical than ever to reduce the General Fund subsidy to the Golf Fund. As shown earlier,
new amenities such as two reconfigured holes, an additional hole, the new golf carts, and an
internet presence have enhanced the course greatly and most likely have contributed to the higher
than anticipated rounds played. But more is needed to close the gap. The remainder of the report
focuses on options for increasing revenues, thereby reducing, as much as possible, General Fund
support to the course.
Rate Increase
At last year's rate review, staff proposed a $.25 per round increase over a four year period.
Realistically, this modest increase is insufficient to close the gap between direct operating costs
and revenues. Therefore, as presented to the Council as part of the "strategic budget direction"
on April 14, 2009, staff recommends raising green fees by $2.00 per round in 2009-10 and by
$1.00 per round in 2010-11. This will be enhanced with 10% increases to the cost of food and
merchandise items, which were put into place on April 1 along with an increase of $1.00 per
rental for electric golf carts, push carts, golf club rentals and driving range ball uses.
Based on the fee increases and the recent year-end projected increase in rounds played, staff
projects additional revenue of $84,500 in 2009-10 and an additional $37,600 in 2010-11.
However, staff anticipates a 12% loss in rounds played due to the fee increase and the state of the
economy, therefore projections are based on 37,600 rounds rather than 42,700. Should LLGC
maintain its average rounds played at around 42,000 rounds per year, the additional revenues
could cover or exceed direct operating costs. (These figures differ slightly from the cost recovery
report presented to the Council on April 14, 2009, primarily because of the new year-end
projections for 2008-09 for rounds played.)
If the recommended fee increases are approved, the direct operating cost subsidy from the
General Fund will be reduced and eventually, LLGC revenues should begin to recover a portion
of the indirect costs also. The recommended fees for 2009-10 and 2010-11 are:
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Laguna Lake Golf Course Fund Rate Review Page 12
Laguna Lake Goff Course Fees, Effective Jul 1, 2009 and July 1, 2010
Current Proposed 2009 Proposed 2010
1st 2 nd Ist 2ndist 2n
10-Holes 10-Holes 10-Holes__ _10-Holes 10-Holes 10-Holes .
Senior/Youth/Student $7.00 $4.75 $9.00 $6.75 $10.00 $7.75
Weekdays (M- Th)
General Weekdays $9.00 $4.75 $11.00 $6.75 $12.00 $7.75
(M- Th
Senior/Youth/Student $8.00 $4.75 $10.00 $6.75 $11.00 $7.75
Weekend (F-Sun)
General Weekend $10.00 $4.75 $12.00 $6.75 $13.00 $7.75
(F-Sun
Senior/Youth/Student $62.50 $82._50 $92:50
10 Play Card
General 10 Play Card $77.50 $97.50 5107.50
Twilight Rate $6.25 $8.25 $9.25
after 3:00pm)
Although LLGC is now a 10-hole course, the proposed rates remain competitive with the two
nine-hole courses in the County:
Pismo State Beach Sea Pines-Los Osos
Seniors: $7.00 weekdays, $8.00 weekends Seniors: $11.00 weekdays, $13.00 weekends
Juniors: $6.25 weekdays, $6.75 weekends Student: $9.50 weekdays, $11.50 weekends
Regular: $9.50 weekdays, $10.50 weekends Regular: $13.00 weekdays, $16.00 weekends
Best Practices
In April 2003, a comprehensive status report on LGCC operations was presented to the Council.
Recommendations were provided for improved cost recovery designed to close the gap between
direct operating costs and revenues. As reported at last year's rate review, most of the initiatives
from that report have been implemented; therefore staff has been assessing new revenue
opportunities with the intent of reducing the General Fund subsidy further.
The following are "best practices" gleaned from research on local courses and benchmark cities
while developing the revenue recommendations to the Council on April 14. These practices
could be feasible for implementation at LLGC but will require further investigation.
1. Offer an "Off Peak"Rate. Staff has observed that Mondays through Thursdays from 11 am
to 3pm are the times when the golf course is used the least, which is a common occurrence
with many golf courses. Some courses offer off-peak rates to entice golfers to use the course
by reducing green fees by $1 to $2 per round and offering free or reduced rate cart rentals.
2. Non-Resident Golf Fee or Resident Discount Rate. Most of the benchmark cities identified
in the revenue recommendations have a non-resident fee or resident discount program as a
part of their fee structure. A non-resident fee could be 25%-30% more than the approved rate
(i.e. General Weekend proposed rate is $12.00: non-residents might pay$15.00). It should be
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Laguna Lake Golf Course Fund Rate Review Page 13
noted that the LLGC use to charge higher rates for non-residents. This was discontinued
because it reduced overall play, and thus reduced overall revenues.
3. Non-Resident Discount Card In tandem with #2, offering a non-resident discount card that
is paid annually would give non-resident golfers who frequently use the course the ability to
receive the resident rate if a non-resident fee were put into place. The cost of the card could
be a modest $25 to $30 per year and cardholders would be eligible for the resident rate by
presenting the card. Again, this needs further analysis to ensure that it does not result in an
overall revenue loss.
4. Unlimited Play or Frequent Player Card Many of the benchmark cities offer some sort of
unlimited play card to their customers, some with restrictions on the hours of play to avoid
use during peak times. An unlimited play card could be offered during off peak times to get
more golfers at the course. The cost would be higher than a 10 play card and purchased on a
monthly basis. Again, this needs further analysis to ensure that it does not result in an overall
revenue loss.
5. Annual Play Cards. Some courses offer an annual unlimited play card, which is similar to
the unlimited play card but is paid annually. A monthly unlimited pass system assessment
should occur at LLGC before considering an annual pass. Again, this needs further analysis
to ensure that it does not result in an overall revenue loss.
6. Frequent User Plan. A part of the new software program allows tracking of frequent users.
A reward system could be put into place where points are awarded for each visit and at some
point, reward points could be used for discounted merchandise, free rounds or cart rentals.
Fleet Replacement
Staff recommends the replacement of a Toro Sidewinder mower, which is used to groom tees and
aprons and also serves as a backup fairway mower (Attachment 3). The mower has reached its
useful life and has served two years beyond the target replacement cycle. Replacing the mower
will cost $25,600 in 2009-10. Depending on the results of competitive bidding, there may be a
cost savings as LLGC receives discounts up to 20% on Toro equipment for hosting a First Tee
youth golf program.
CONCURRENCES
The Parks & Recreation Commission reviewed the golf course report and concurs with the report
findings and recommendations. During discussion of the rate review, the Commission
acknowledged that the course provides a viable recreational opportunity of significant benefit to
youth, seniors and the general community and hoped for the continued financial support of the
City. As such, the Commission recommends that Council support the proposed green fee
increase and General Fund subsidy. Minutes from the May 6, 2009 meeting are provided in
Attachment 4.
JD R 1 :5
Laguna Lake Golf Course Fund Rate Review Page 14
FISCAL IMPACT
The following are the proposed operating transfers from the General Fund for FY 2008-09 and
FY 2009-10. The mid-year budget review figures were used as the basis for these projections:
Pro osed O erating Transfers from General Fund
Variance
Mid Year End of Year Favorable
Year Budget Review Estimated Unfavorable)
2008-09 $316;500 $293,900 $22,600
2009-10 $309,300* $283,700 $25,600
2010-11 '$207,200—T— $0
*Reflects the projection on the Working Capital report from last year.
The favorable variances are adjustments from the mid-year budget review and based upon the
assumptions and estimates.
FY2008-09: Deferral of uncompleted CIP projects (pro shop roof repair, tree replacement,
Corp Yard fuel/gate replacement) to next fiscal year, along with some savings in the operating
budget account for the favorable variance for 2008-09.
FY2009-10: There are two reasons for the projected favorable variance:
1. Staff is anticipating a 12% reduction in rounds played as a result of the $2.00 per round
increase. Should rounds remain consistent with the average of 42,000 rounds per year, the
green fees could be about $30,000 more than the projection.
2. Deferred CIP projects from 2008-09, as listed earlier in the report, will also reduce the
subsidy.
History of Golf Course General Fund Subsidy
Based on a query from Councilmember Marx, staff prepared a "snapshot" of the General Fund
subsidy over the past 7 years and projections for 2008-09, 2009-10 and 2010-11:
Laguna Lake Golf Course Fund Rate Review Page 15
Golf Fund Subsidy : 200 1-02 . 2.010-11
Genera[Fund Subsidy
Direct Operating
Direct Operating Cost Subsidy Direct Operating Support Costs Total General
Fiscal Year Ending Costs M) Cost Subsidy (Gen Govt) CIP Projects Fund Subsidy
2002 _ $ 68,100 26_% $95 500 _ _
_ v $113,700 $0 ^$22.1,700
2003 $375,000 __ 25% __._$92,200 $117,1400 J $13,300 $252,000
2004 _ $377,700, i 20% $76,000 $10_3,200 $17,100_ $171,700
%
2005 $391,400 19 '$74,300 $1$106,300 $1,400 $176,900
2006 $412;700 16% $67 400 A11_7,100 $80 700 . $255..300
2007 _ $475,800 _ 18%_ _ $87,100 _ $120,000 $17,400 $350,900
2008 _��$4634300 _ 22% _$100,100 _ $157=3,00 $247 100 $465,600
2009(Estimated) $518,900 27% $140400 $163,600 $130,600 $293,900
2010(Budget___ $524,400 9% ' $47;300 .$169_,700 $66;700 $283,700
2011 (Budget) $539,800 6% $34,100 $173,100 R $0 $207,200
In summary, all indirect costs (general
government) and CIP projects historically 30% Golf Fund Direct Operating Cost Subsidy
have been funded by the General Fund, with
direct operating cost subsidies ranging from z5% -
a high of 27% to projections of 9% and 6%
in .2009-11. The overall General Fund 15% - - - - - -
subsidy has varied from year to year, largely ,o% - - - - - -
because of CIP projects. However, LLGC 5% - - - - - - - - -
has performed consistently over the years in
0°h
terms of rounds played and revenues0 . 0
N f0 n f0
O O O O O O O Q? O OD O
generated. N N N N N N N p E p 9 p 9
o E N N
N
Fiscal Year Ending w
It is staffs conclusion that given the lack of
a full-sized driving range, restaurant and bar
facilities, the golf course is performing as well and as efficiently as it can perform. While some
options exist for the generation of minor new revenues (and these will be researched further),
significant revenue potential at this time is limited to increasing green fees, which in itself is
restricted by how much the market will bear before the cost becomes prohibitive for our
customers. As noted above, we have experienced overall revenue reductions in the past where
rate increases resulted in decreased rounds played.
So the question before Council is: "Does the City want to be in the golf business?" If so, then a
General Fund subsidy for at least support (general government) and CIP costs is a reasonable
expectation for years to come. If not, alternatives ranging from partial to full lease to closure of
the course have been provided for Council's consideration.
I
Laguna Lake Golf Course Fund Rate Review Page 16
ALTERNATIVES
The alternatives listed below are options if the Council wants to take measures to get out of the
golf business partially or completely. Further investigation of these alternatives would need to
occur as these are "order of magnitude" estimates based upon research to-date.
1. Contract-Out the Golf Course Operations (Pro Shop). At many municipal golf courses,
this is a common practice, as is the case at Dairy Creek and Mono Bay Golf Courses (owned
by the County) and also found in city-owned courses in Santa Cruz and Santa'Barbara.
County/city staff maintains the course while the operations of the pro shop, rentals and
restaurant are handled by a private contractor, with oversight as needed by agency staff.
Generally, the County recoups the costs of the green fees, a portion of the electric cart rentals
and facility rent.
Using this management model for LLGC, the budget for maintenance and operations would
be divided as follows:
Pro Shop
Maintenance Operations
Staffing/Fringe $ 276,100 $69,100
Materials/Supplies $149,300 $52,200
Expenditure Total $425,400 $121,300
Revenues $311,100 $76,300
Net $114,300 $451000
Revenues tied to maintenance would be the green fees, all cell site rents and leases and 25%
of the golf cart rental revenue. Pro Shop Operations would recover all rentals, food and
merchandise sales and 75% of the golf cart rentals.
For a private venture to be successful, it would need to recover $121,300 to break even
before paying rent and a portion of the gross revenue to the City. Since some facility
improvements are needed for a private vendor to operate a restaurant or even a small snack
bar, it would be difficult for a private venture to be successful at LLGC; this was the case
when the pro shop operation was leased-out 30 years ago. A General Fund subsidy would
still be needed for a reduced portion of the support service costs, any CIP projects and a
portion of the maintenance costs. The LLGC staff responsibilities would require oversight of
the contract and supervision of the maintenance staff would still be needed.
2. Contract-Out the Golf Course Maintenance and Operations. This is a practice that many
public facilities have in place and is currently the model used at Chalk Mountain (County)
and Pismo State Beach (State). Management of the contract would still need to be handled
by someone in the City. The City would become the "landlord" and manage any CIP
projects. The City would recover revenues related to rental of the pro shop facility, a portion
of the gross revenues and cell site leases. Support costs allocated to the Golf Fund would be
reduced significantly but most of the difference would be reallocated to other general fund
and enterprise fund programs.
Igg I -).7
Laguna Lake Golf Course Fund Rate Review Page 17
The biggest question is whether a management company could effectively operate a course
with the limitations of LLGC and make a profit (see opinion of San Luis Obispo County Golf
Superintendent in Attachment 5). If profit margins are stressed, it is likely that reductions
would occur at the maintenance level, which is what happened in the 1970's. This would
have a significant impact on the course and quality of play could deteriorate. Mowing, water
usage, and staffing levels would be the likely candidates for a reduction. This has been
observed by current course patrons that have played at Chalk Mountain and Pismo State
Beach.
On the other hand, a management company with multiple courses may view LLGC as an
enhancement to its present offerings and be willing to backfill losses with profits from other
courses for the sake of customer service. If this is an option, further study would be needed.
3. Close LLGC. This would result in reduced recreational opportunities for seniors and youth.
Additionally, closing LLGC would not significantly reduce indirect support costs: these
largely would be redistributed among the other enterprise funds and the General Fund.
Additionally, the land would have to be maintained for weed control and extensive work
would need to be done should the site ever be restored as a golf course. The parcel where the
driving range and maintenance shop are located was purchased with a Land and Water
Conservation grant in the early 1970's and there is a caveat in the deed that the land would
have to remain as park land or open space. In short, any serious consideration of this option
would require significant analysis of reuse options and their costs.
ATTACHMENTS
1. Changes in Working Capital—Golf Fund
2. Comparison of Golf Course Amenities with Other Public Golf Courses in the County
3. CIP Request: Fleet Replacement—Golf Course Mower
4. Parks & Recreation Commission Draft Minutes—May 6, 2009
5. Letter from County Golf Superintendent
6. Resolution Adopting Fee Increases
T:\Budget Folders\2009-I I Financial PlanTriterprise Fund Working Capital\4.Golf\CAR-2009 golf fund review-final 6.11.09.doc
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ATTACHMENT 2
Comparison of Golf,Course Amenities with Other County Public
Golf Courses
Course Laguna Chalk Morro Sea Pines Dairy Pismo State
Lake Golf Mountain Bay State Creek Beach
Course Park
Number of Holes 10 18 18 9 18 9
Operations/Maintenance Owned, Owned by Owned Privately Owned Owned by
operated County of and owned, and State Parks,
and SLO, maintained operated maintained maintained
maintained maintained by County and by County, and operated
by City of and of SLO, maintained operated by private
San Luis operated operated by private vendor
Obispo by private by private vendor
vendor vendor
Pro Shop Yes Yes Yes Yes Yes Yes
FoodlSeverage Pre- Snack Bar, Restaurant Restaurant Restaurant Pre-packaged
Services packaged alcohol with with with foods, bottled
foods, served outdoor outdoor outdoor drinks on site;
bottled seating, seating seating, restaurant/bar
drinks bar and bar bar across
nearby arkin lot
Practice Areas Putting Putting Putting Putting Putting Putting Green
green Greens(3) green, greens(2) greens,
chipping chipping
area area, sand
trap
practice
area
Driving Range Yes — Yes — full- Yes — full- Yes — full- Yes- full- No
small sized sized sized sized
Other Lodging Has location
adjacent to for weddings,
course owner is
upgrading
clubhouse to
accommodate
wedding
parties
LEISURE, CULTURAL SOCIAL SERVICES
FLEET REPLACEMENT—MOWER FOR GOLF COURSE
CIP Project Summary
Replacing one tee and apron mower in 2009-10 will cost$25,600.
Project Objectives
1. Comply with fleet replacement policy.
2. Keep maintenance costs reasonable.
3. Provide safe and productive work environment.
Existing Situation
The current mower,a Toro Reelmaster 3100D Sidewinder, is utilized daily by maintenance staff at Laguna Lake
Golf Course to groom the tees and aprons and serves as a backup for the fairway mower. This unit is central to
this primary turf care but is experiencing higher than normal down time for repairs related to hydraulics and
mechanical components. The mower is two years beyond the target replacement age and is at the hours-of-
operation replacement target. The decision to replace this piece of equipment is based on a combination of the
following factors:
1. Actual miles or hours of operation compared to replacement miles or hours in Fleet policy.
2. Actual years of operation compared to expected years in Fleet Policy.
3. Review of mechanical'condition and history by Fleet Supervisor and operating Department users.
4. Evaluation of maintenance costs by Fleet Supervisor and operating Department users.
Goal and Policy Links
1. Fleet Management Policy, section 405 of the Financial Management Manual
2. Fleet Operating program goal to provide safe;efficient,and reliable vehicles and equipment.
Project Work Completed
The fleet manager has evaluated the condition of the proposed fleet replacements for conformance with fleet
management polices and operational needs, and researched pricing through the State's cooperative purchasing
program or other sources.
Environmental Review
No environmental review is required.
Project Constraints and Limitations
No project constraints or limitations exist.
Stakeholders
Laguna Lake Golf Course and Fleet Maintenance
7-1 :ATnc,H,r,I xr_ 3
LEISURE, CULTURAL & SOCIAL
• SERVICES
FLEET REPLACEMENT—MOWER FOR GOLF COURSE
Project Phasing and Funding Sources
Project Costs by Phase
Project Costs
Budget-to-Date 2009-10 2010-11 2011-12 2012-13 Total
Equipment Acquisition 25,600 25,600
Total - 25,600 - - _ 25,600
Project Funding by Source
General Fund as a subsidy to the Golf Fund.
Key Project Assumptions
1. Vehicle replacement costs are based on existing State cooperative purchasing prices.
2. Vehicle miles at the time of replacement are projected assuming the same proportional usage rate in the
future as year-to-date age and usage.
Project Manager and Team Support
Project Manager
Ron Holstine—Fleet Maintenance Supervisor
Project Team
Todd Bunte—Golf Course Supervisor
Ron Holstine—Fleet Maintenance Supervisor
Alternatives
Deny, Defer or Re phase the Request. This will lead to proportionally higher costs for maintenance and
operation reflected in the program budgets for Fleet Maintenance and the Department using the equipment.
Operating Program
Golf Course(60700)
Project Effect on the Operating Budget
Project Management
Responsible Staff Hours
Golf Maintenance Staff 8
Fleet Maintenance Staff 16
Public Works Administration 8
A 71LEISURE, CULTURAL & SOCIAL AC!
SERVICES
FLEET REPLACEMENT-MOWER FOR GOLF COURSE
Operations and Maintenance After Project Completion
Typical annual costs for preventative maintenance such as oil/filter changes, inspections, plus as-needed
replacement of wear parts such as tires, batteries,brakes, filters, lamps, and fuses.
Description of Replacement Units
Replacement Fiscal Year 2009-10
City Fleet Number 0005
Vehicle Type Mower
Make Toro
Model 27"
Model Year 2000
Date Entered City Service 2000
Hour Meter Readino at 11-01-08 4445
Replacement Guidelines
Target:Years/Hours 7/5000
Projected at Replacement: 9/5000
Replacement Cost
Base Unit $22,200
Accessories&Other Costs $1,000
Special Painting/Striping $100
Delivery $300
Sales Tax $2,030
Total Replacement Costs $25,630
Total: 2009-10 1 $25,600
UTACHP,1EfdT�
Parks and Recreation Commission
DRAFT MINUTES
Council Hearing Room, 990 Palm Street
San Luis Obispo, CA
Wednesday, May 6, 2009, 7:00 p.m.
CALL TO ORDER: Vice Chair Craig Kincaid called the meeting to order at 7:00 p.m.
ROLL CALL: Commissioners: Gary Havas, David Hensinger, Kylie Hatch, Ron Regier,
and Steve Davis
ABSENT: Chair Jill Lemieux
STAFF: Director Betsy Kiser, Marti Reynolds, James Bremer, Linda Fitzgerald and
Todd Bunte
CONSIDERATION OF MINUTES:
MOTION: (Havas/Regier) Approve the April 1, 2009 minutes as amen d.
Approved: 5yes: 0 no: 2 absent (Lemieux,Davis)
1. Public Comment
None.
2. Volunteer of the Month'
The May Volunteer of the Month is The ly Goats. Established in 1966, the Poly Goats Four
Wheel Drive Club is one of the olde clubs still active at Cal Poly University. In addition to
finding spots throughout the count of off road, the Poly Goats also participate in community
service projects. In the past, they ave participated in clean ups at the Oceano Dunes, Pozo and
other off-roading spots throug ut the county.
As part of Adopt-A-Crag April 4, 2009, the Poly Goats assisted with the removal of a rusty
old car from a creek dr nage ditch near the pond on Bishop Peak. Using trucks and wenches,
they dragged the car ut of dense poison oak, allowing for the dismantling and disposal of it.
Removal of that ' d of debris helps restore the Open Space and eliminates the potential of it
being dislodge uring a storm which could destroy habitat or damage existing trails. It is with
great apprec' ion that the Parks and Recreation Commission recognizes the Poly Goats as the
Volunteer the Month.
3. Golf Rate Review— Kiser/Bunte
Director Kiser provided an amended golf report to commissioners updating working capital
figures. She explained that the general fund subsidy will continue to change as we approach the
end of the year and revenue projections change.
The review recommends increasing green fees by $2/round for 2009-2010 and an additional
I. 1
atrxCHMEnt_ y=
Parks and Recreation Commission Minutes
May 6, 2009
Page 2 of 6
$1/round for 2010-2011. Director Kiser gave the history of Laguna Lake Golf Course (LLGC),
its Enterprise Fund/General Fund designation and that it has been unable to create sufficient
revenues to cover operations and maintenance in its 45-year history. Director Kiser listed recent
enhancements and efforts to get the course and greens in shape and provided a rate overview. She
explained the budget and fiscal policies governing the golf course: revenues to cover direct
operating costs, with flexibility for General Fund subsidies if necessary for public benefit.
Director Kiser discussed assumptions used :to support rate increases, including rounds played,
CEP carryover, replacement of mower, and potential revenue from telecommunication cell site,
and operating efficiencies. Director Kiser emphasized that the LLGC is affordable recreation in
tough economic times. An RFP will be released this year for a 3`d cell site to increase revenues.
Limitations of the course to generate significant revenues were pointed out. lack of a full-size
driving range, no restaurant/bar on premises and enhancements needed to the pro shop. Showed
best practices comparisons/possibilities (offering non-resident discounts, off peak rates, etc.)
which need further development.
Recommendations to City Council include:
a) Approve the Revenue Enhancement request to increase green fees by $2.00/round in Y
2009-10 and by $1.00/round in FY 2010-11 and direct the golf course supervisor to
increase the cost of food and merchandise items by 10% and rental charges by
$1.00/use for FY 2009-10.
b) Approve the Fleet Replacement request of $25,600 for a tees/apron/fairway mower in
FY 2009-10.
c) Authorize a reduction of the General Fund transfers for 2008-09 by $16,000 and in
2009-10 by $23,100. (in theory, recognizing this amount will change over the next
month).
d) Adopt a resolution approving green fee increases of$2.00/round effective July 1, 2009.
Alternatives in anticipation of Council's concerns include: 1) contract out operations (pro shop);
2) contract out whole facility, however; if uncared for and take back, will bear the burden of
bringing back `up to par' or 3) to close facility altogether.
Commissioner Kincaid inquired and discussed the topic of selling LLGC but the Commissioners .
did not care to make a proposal for that option.
Commissioners requested clarification from Golf Course Supervisor Todd Bunte on the 10%
increase on sales items, as well as fleet replacement.
Commissioner Hensinger offered ideas on adding features such as a "Pitch and Putt", miniature
golf, game room and batting cages (Kiser explained existing batting cages and their closure this
year due to budget reductions and prepaid contributors being the main users). Discussed lighting
and sound issues may be of concern but it could draw more passersby from Los Osos Valley
Road.
Commissioner Havas asked about adding a virtual simulator, much like those in golf shops, that
tracks golf ball travel (as if in a full-size driving range) as a potential revenue generator. Director
P4 f-a�
Al 1ACH1,UNT_Lf _
Parks and Recreation Commission Minutes
May 6, 2009
Page 3 of 6
Kiser said she would try to investigate further.
Commissioner Kincaid commended Golf Course Supervisor Bunte for his work and discussed
the course in terms of capacity. Bunte explained the new software installed allows online tee-
time reservations and will help track numbers, but estimated assigned tee times number 160 of
the 292 slots available/day.
Director Kiser explained that an enterprise fund should recover all costs associated with the
operation and maintenance of a program, including indirect operating costs as well. This makes
the golf course different than the General Fund supported programs such as aquatics or facilities,
which only need to recover a portion of their costs. The Commissioners discussed their concern
that the golf course is considered an enterprise fund, when course limitations prevent it from
truly functioning as an enterprise fund. They felt the LLGC is a valuable community resource
that serves a large group of people and that it should be given consideration as a General Fund
program.
Marketing and promotional tactics were briefly inquired about by Commissioners and
Commissioner Davis inquired about trading free golf with work from designers.
Public Comment:
Anne Spence, San Luis Obispo resident and a member of the Women's Golf group stated that
her group, as well as Men's Golf, plan on attending the Council meeting on this matter.
Explained golf to be a family-oriented activity for seniors/grandparents and youth allowing
participation in a different type of outdoor sport that takes a certain amount of time to complete
and thus allows for time to talk. Ms. Spence listed potential revenue sources such as putting
together a volunteer group that meets regularly, restoring the barbeque pit which, since it has no
kitchen or public health requirements, could be more easily utilized. Also suggested the driving
range be turned around to increase or better utilize designated area rather than exploring a new
range location.
Commissioners recommended promoting LLGC to be a `green' resource.
MOTION 1: (Hensinger/Havas)
The Commission unanimously supports the LLGC and believes that the course provides viable
recreational opportunities of significant benefit to youth and seniors and the general community
and deserves the continued financial support of the City.
Approved: 6 yes: 0 no: 1 absent (Lemieux)
MOTION 2: (Regier/Havas)
Move recommendations be forwarded to Council as listed in the report.
Approved: 6 yes: 0 no: 1 absent (Lemieux)
MOTION 3: (Kincaid/Regier)
��
ATinCHMENIT � .
Parks and Recreation Commission Minutes
May 6, 2009
Page 4 of 6
Encourage Council to reconsider designation of LLGC as an Enterprise fund based on discussion
that it doesn't function in the marketplace with competitive golf courses.
Approved: 6 yes: 0 no: 1 absent (Lemieux)
2009 Park Tour—Kiser
D' for Kiser discussed the June 24 Park Tour options once more with the Commissioners to
finaliz route. Reservoir Canyon was eliminated from the list. It was noted that the bike path
enhance nts were viewed last year. Since the Johnson Ranch dedication is May 22, discussed
eliminating, although it is convenient for pointing out the Calle Joaquin area. The Joint Use
Committee re ommended the Laguna Middle School. It was also felt the Jack House could be a
drive-by to vie improvements as it was visited in detail last year. As the Senior Center dedication
wilI be on May _ or 29, it was felt that could be skipped as well. There was still interest in the
Skate Park, Damon arcia and the Swim Center as well as the community gardens. Public Art will
be included all thr ghout the tour. Vice Chair Kincaid suggested viewing the LLGC
improvements at the en f the tour.
5. Staff Report—Bremer
Recreation Supervisor James B mer gave a PowerPoint presentation to the Commissioners
detailing the Facilities operation ich he has managed since the department reorganized in
2005. Bremer explained the amount staff needed to man each facility or field during operation
and the behind the scenes coordinatio involved in running this support section efficiently.
Managing the various amenities includes i uring cleanliness of the facility, scheduling use with
over 2,000 permits issued annually, coordina 'ng maintenance with building maintenance, parks
maintenance and contract cleaning.
6. Director's Report—Kiser
Director Kiser briefed the Commission on the following p 'ects:
• Budget Reduction Options: City Manager has r ommended most of the budget
reductions submitted by Parks and Recreation staff and n w revenues. We did manage to
recover the Enrichment Class program, Environmental Ed ation program and keep the
Adult Sports Coordinator. $267,200 in program reductions, ' h a loss of 7.06 FTE and
proposed revenue increases of$123,200 for FY 2009-10. Budget earings will be June 4.
• Staff received word from the Ludwick Foundation that we were not s ected to receive a
grant from the foundation this year. Mr. Ludwick had his heart set on f ding an HVAC
system for the gymnasium portion of the building, but completion of t project was
dependent on a City match and on-going maintenance and operation costs. Given the
existing budget situation, staff did not feel the HVAC system was a priority at is time
and requested other items instead.
IN 1 _
' ATlnC!iPAENT
April 1, 2009
To Whom It May Concern:
Linda Fitzgerald and Todd Bunte representing City of San Luis Obispo recreational services
contacted me as a reference about municipally owned and operated golf facilities. It was
expressed that the City was considering options pertaining to operating Laguna Lake Golf
Course.
It seems the city is considering contracting concessionaires to operate parts or all of the golf
course. Without having a food and beverage operation or a full service driving range and
practice area it will be difficult to attract a concessionaire to operate the pro shop without
offering them a slice of the green fees and/or cart rental fees,both of which are needed to
support course maintenance. A contract to operate the entire facility is the only attractive
option for a concessionaire. The down side to this scenario is that there are few reputable
management companies interested in 9-hole operations without reasonable teaching or F&B
facilities and many local concessionaires have little to no experience maintaining a golf
course.
Giving up direct control of daily operations of the golf course could be disastrous without a
competent operator who desires to provide the customers of the City of San Luis Obispo the
conditions they have become accustomed to over the years. Turning the operations over to a
concessionaire could potentially lead to reduced service,poor conditions, and ultimately
unhappy customers. Holding a concessionaire accountable for the condition of your assets is
not a cut and dry relationship. The city will want some percentage of rent for the course and
its amenities with an expectation of a level of maintenance equal to city standards. Generally
it is my experience that without ownership concessionaires have a difficult time attaining the
desired level of maintenance and conditions begin to deteriorate, as I am sure the city has
experienced with various concessionaires throughout the years.
Laguna Lake Golf Course is a perfect example of what a municipal golf course should be
about. The course offers a great experience for multiple generations of golfers to recreate
and exercise. Golf often times is considered an elitist sport, but golf at the grass roots level
like Laguna Lake and many other public golf facilities is about health, recreation, social
bonding, and just having fun! There are not many other physical activities where three or
even four generations can spend two to four hours outside together and everyone enjoying
themselves and each other. Laguna Lake Golf Course seems like a perfect fit for mission
statement of the city's park and recreation department.
Please feel free to contact me if I can be of any help or service.
Sincerely,
Josh Heptig
Golf Superintendent
County of San Luis Obispo
(805) 781-1318
iheptip-@co.slo.ca.us
PAS-a7�-
ATTACHMENT
RESOLUTION NO. (2009 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AMENDING LAGUNA LAKE GOLF COURSE FEES
WHEREAS, it is the policy of the City of San Luis Obispo to review program fees on an
ongoing basis; and
WHEREAS, fees are adjusted as required to ensure they remain equitable and adequate
to cover the cost of providing services; and
WHEREAS, an analysis of the Golf Course Fund was performed for 2009-11 and
presented to the Council for its consideration on June 11, 2009.
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Effective July 1, 2009, green fees shall be as follows:
LAGUNA LAKE GOLF COURSE FEES - 2009
I" 10-hole 2°d 10-holes
Senior/Youth/Student Weekdays: $9.00 $6.75
(Monday through Thursday)
General Weekdays: $11.00 $6.75
(Monday through Thursday)
Senior/Youth/Student Weekends: $10.00 $6.75
(Friday through Sunday)
General Weekends: $12.00 $6.75
(Friday through Sunday)
Senior/Youth/Student $82.50
10-Play Card: .
General 10-P1a Card: $97.50
Twilight Rate:
SECTION 2. Effective July 1, 2010, green fees shall be as follows:
LAGUNA LAKE GOLF COURSE FEES - 2010
I" 10-holes 2°d 10-holes
Senior/Youth/Student Weekdays: $10.00 $7.75
(Monday through Thursday)
General Weekdays: $12.00 $7.75
(Monday through Thursday)
Senior/Youth/Student Weekends: $11.00 $7.75
(Friday through Sunda
TP I-a�
ATTACHMENT
Resolution No. (2009 Series)
Page 2
General Weekends: $13.00 $7.75
(Friday through Sunday)
Senior/Youth/Student $92.50
10-Play Card:
General 10-Pla Card: $107.50
Twilight Rate: $9.25
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 & Recreation and the Golf
Course Supervisor.
Upon motion of , seconded by , and on the
following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was adopted on June 11, 2009.
Mayor Dave F. Romero
ATTEST:
Audrey Hooper, City Clerk
APPROVED S TO FORM:
0
�jo-7
Jonathan P. Lowell, City Attorney
PSS-a�
T:Oudget Folder.02009-1/Financial PIo Tjoerprise Fend Working Caph h4.Gu1JIRerohnimt-LLGC 2009.DOC
01
June 11, 2009 City Council Meeting,Topic: Laguna Lake Golf Course — ' i/r 1 D y'
My name is Joan Scholz. I reside at 3295 Flora St. in San Luis Obispo. I would like this
to be entered into the public record regarding Laguna Lake Golf Course.
I am a 30 year+ resident of San Luis Obispo, and have grown to love our beautiful city.
I have been golfing for about 5 years, and never expect to be world-famous. However, I
love having Laguna Lake Golf course here in town, close enough to play regularly, as
well as one or two times per week besides playing with the Laguna Lake Ladies Golf
Club. Because it is a 10-hole course, there is really no need to sit in a cart to get
around it. So, we enjoy the walking between holes, and we play 18 holes. For me, this
is very good, as I am a survivor of an aneurism in the brain 1 1/2years ago. I was very
fortunate, as I survived, not only to breath again, but to be able to do everything I could
before the aneurism!
The walking of the course is great for my physical exercise, and it is much more fun to
laugh & talk with friends while walking, & challenging to say the least, to hit that little
round white ball, from great distances, into that very small hole. I can rightly say, I hit a
90 yard ball into that little hole, 3 months after the aneurism! For me, I sure hope you
wouldn't think of closing the course!
I have several friends, of all ages, many of them are years older than I am at 71, who
play excellent golf. They have very low handicaps, which requires very good skills of
the game, and at 90+ they are still keeping their low handicaps. They like to play for the
exercise, both mental and physical, at Laguna because they can walk the course. The
big 18-hole courses often require one to rent a cart to play, so you can't get the walking
exercise, and you hit the ball, over & over, not being strong enough anymore to hit 200
or 300 yards at a time. And, although, as everyone who plays at Laguna, we mumble
about the "elephants buried under the holes" (nearly all the holes are raised several
feet), we find this just makes them more challenging.
We hope you will consider the valuable asset of fresh air, great weather, & great
physical & mental exercise, which is the outcome of being able to play on such a
challenging little golf course. You ought to join us sometime, (we love to have company)
and have a lot of fun, too!
I thank you for your time and consideration of this matter.
j.
Ehr�ai, Barbara
From: webserver@slocity.org
Sent: Thursday, June 11, 2009 3:12 PIA
To: Ehrbar, Barbara
Subject: Contact Us Form
Name: Jay Jansson
Address: 1580 Populus Ave
City: San Luis Obispo
State: CA
Zip: 93401
Phone: 805 549 0477
Fax:
email from: jjanssonll@yahoo.com
Message:
I am writing in support of the Laguna Lake Golf Course. It is in the best shape I have seen it in some 30
years. The staff and grounds crew led by Todd and Willie are doing a tremendous job. If it takes
raising the rates to keep it going, then I'm fine with that. Thanks, Jay Jansson
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,'Council, SloCity
From: Phil Bailey[pbailey@calpoly.edu] Sent: Thu 6/11/2009 10:25 AM
To: Council,SloCity
Cc:
Subject Laguna Lake Golf Course
Attachments:
Dear Council Members:
First, thank you for your service to the.City of San Luis Obispo. As long
term residents (1969)Tina and I have been active members of the community
and really appreciate the service of so many people who have made San Luis
Obispo a special place.
I am writing to support the agenda item today to improve the financial
situation of the Laguna Lake Golf Course with increased fees.
I also want to express my support for the Laguna Lake Golf Course in
general. It is a beautiful and important recreational asset for the City
and a source of open space that makes the Laguna Lake area especially
pleasant, as well as the City in general.
I know that periodically the question arises as to whether the City should
retain ownership and operation, lease, or sell the property. I was part
of the group that encouraged the City in the early 1970's to acquire the
property. This acquisition was and remains important to the future of San
Luis Obispo and the environment that characterizes our city.
There are temptations is bad budget years to find quick solutions to
temporary problems. As dean of Cal Poly's College of Science and
Mathematics for the last.26 years, I too have had to address serious
budget issues; I avoid actions that will have lasting negative effects on
our programs. I realize that leasing or selling the Laguna Lake Golf
Course property is not on the agenda for today's meeting. Nevertheless, I
want to encourage the Council to recognize the golf course for the
incredible asset it is to San Luis Obispo and to continue to pursue
policies that will maintain this land for the beauty and enjoyment of
generations to come.
Thank You.
Phil Bailey
1628 Royal Way D CoP f11�—
San Luis Obispo, CA 93405 RED FILE COUNCIL G'CDD Dip
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— MEETING AGENDA
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I have been told that the City is considering the leasing or sale of this public
golf course due to maintenance cost.
While 2008 may have run over expected costs due to the installation of the
new third hole and the installation of the bridge from the current 7th hole to
the 7" green these were one time expenditures and not because of course
management.
I believe that you are also considering a 25 to 30% increase in green fees. I
believe that you would find that an increase of this size would probably
result in a reduction of play and a corresponding reduction in income.
Persons like myself who play the course 80 to 100 times a year and are on a
fixed income would have to reduce play.
It would also seem that being part of the Parks and Recreation Department
the golf course is supplying service to seniors, children through first tee
programs and to students through golf P.E. Programs and should not be
required to be totally cost efficient let alone help support other programs.
On behalf of myself, other seniors, and youth golfers, I wish you would
reconsider your plans and make reasonable increases as has been done in the
past.
Sin rely,
enneth C. Johnso
Box 6184 RECEIVED
Los Osos, Ca. 93412 MAY 2 6 2009
SLO CITY CLERK
Mr. & Mrs. Robert P. Bryn
3057 So. Higuera St. SP.#82
San Luis Obispo, Ca. 93401
(805)-545-7970
San Luis Obispo City Council
900 Palm Street
San Luis Obispo, CA. 93401
Dear Council Members,
It has been brought to my attention the City Council is looking at
new ways to deal with the Laguna Lake Golf Course facility.
Some sources indicate major changes, such as selling or
leasing the property to increasing the fees drastically.
Personally, I have been involved with this course for several
years, both as a regular customer and volunteer worker. It was
through my, and other seniors, efforts we were able to purchase
electric golf carts for the course that paid dividends to the City
of San Luis Obispo, not to us. In other words, we made you the
beneficiary of the income.
This eventually led to the City leaseing new carts that have given
the City a profitable return.
Please understand, many of us can no longer get our exercise
without this facility and raising the fees too much will only result
in lower rounds played.
Please look at every aspect of this facility, consider whom you
will be affecting, both young and old. Many youngsters &
students enjoy this course.
Sincerely,
i 4
Bob Bryn
RECEIVED
MAY 2 6 2009
SLO CITY CLERK
a
MAY 2 6 ZUUS 1778 Partridge Dr.
San Luis Obispo, CA 93405
May 21, 2009
San Luis Obispo City Council
900 Palm Street
San Luis Obispo, CA 93401
Dear Councilors:
I have recently learned that you are contemplating the future of the Laguna Lake Golf
Course. I understand you have a number of options that range from significant price
increases to selling the land.
When you deliberate I would like you to be mindful of the class of people that use this
precious facility. The patrons are overwhelmingly older people and younger people—
precisely those that were the supposed beneficiaries of the increase sales tax adopted by
measure Y.
The older and younger people are the ones on fixed incomes and they cannot handle well
the slightest increments in their costs of living.
The older people especially need to be involved in wellness and fitness activities. Many
of the golfers are not strong or agile enough to swim or play tennis, and golf is a perfect
activity for them. I personally witnessed an increase in the number of older people
playing golf at Laguna Lakes once golf carts were introduced.
The golfers at Laguna donate both time and money to help the staff keep the course in
good condition and competitively priced. In fact, the money to buy the first golf carts that
proved their value, was donated by Laguna Lake golfers.
Please make an equitabledecision that neither favors nor discriminates against golfers,
but one that does preserve this great community asset.
Sincerely,,�J� 0 /
U
Dan H. Hinz
RECEIVED
MAY 2 6 2909
SLO CITY CLERK
May 25, 2009 MAY $ 7 2009
San Luis Obispo City Council
900 Palm Street
San Luis Obispo, CA 93401
Dear Council members:
I have recently learned that you are contemplating the future of the Laguna Lake Golf
Course. I understand you have a number of options that range from significant price
increases to selling the land.
When you deliberate I would like you to be mindful of the class of people that use
this precious facility. The patrons are overwhelmingly older people and younger
people—precisely those that were the supposed beneficiaries of the increase sales
tax adopted by measure Y.
The older and younger people are the ones on fixed incomes and they cannot handle
well the slightest increments in their costs of living.
The older people especially need to be involved in wellness and fitness activities.
Many of the golfers are not strong or agile enough to swim or play tennis, and golf is
a perfect activity for them. I personally witnessed an increase in the number of older
people playing golf at Laguna Lakes once golf carts were introduced.
The staff and golfers at Laguna Lake take great pride in keeping the course in good
condition. In fact, the money to buy the first golf carts that proved their value, were
donated by Laguna Lake golfers.
Please consider the local citizens who depend on Laguna Lake Golf course for
exercise and recreation at a reasonable cost. Many people would be affected by a
substantial increase in fees. This golf course is a great community asset.
Sincerely,
Frank Azevedo
RECEIVED
MAY 2 7 2009
SLO CITY CLERK
Richard W. Zeller
839 Dugan Drive
Pismo Beach, CA 93449
(805)474-8113
RECEIVED
May 28, 2009
JUN 1 1009
San Luis Obispo City Council SLO CITY CLI=RK
900 Palm Street
San Luis Obispo, CA 93401
Dear Council Members:
I have recently learned that you are to decide the future of the Laguna Lake Golf Course. I
understand you have a number of options ranging from significant price increases to selling the
land.
I would like you to keep in mind the demographics of people that use this fine City facility. More
golfers than not are senior citizens and college age and younger people. Was this not the
demographic that was suppose to benefit from the increase in sales tax adopted by Measure Y?
The senior citizens and college age and younger people are the ones on fixed incomes and they
cannot handle the slightest increase in their costs of living.
The senior citizens especially need to be involved in wellness and fitness activities. Many of the
golfers are not strong or agile enough to swim or play tennis;golf is a perfect activity for them.
The golfers that use this course are not only from San Luis Obispo; many are tourists and
residents from neighboring cities.
Once electric golf carts were introduced,there was an increase in the number of older people that
began playing golf at Laguna Lake Golf Course.
Some of the golfers at the course donate both time and money to help the staff keep the course in
good condition and competitively priced. In fact,the money to buy the first electric golf carts
that proved their value was donated by Laguna Lake golfers.
Please make a fair decision that neither favors nor discriminates against golfers,but one that does
preserve this great community asset and lives up to the intent of Measure Y. Do not let the
voters down!
Sincerely;.
Richard W.Zeller
APR 1 zogy 1490 Descanso #2
San Luis Obispo, CA 93405
April 11 , 2009
To San Luis Obispo City Council Members:
am writing this letter in support of and praise for the Laguna Lake Golf
Course. As a tax payer in San Luis Obispo I have often had the
opportunity to play the golf course. It is very well maintained and always a
pleasure to play golf there.
As a long time part time employee working in the pro shop at the golf
course, I receive many compliments.about the beautiful course from local
golfers and tourists alike. Special thanks for the condition of the course
must go to Todd Bunte, Golf Course Supervisor, and his two
greenskeepers. I have been a public employee all of my adult life and
have never seen a public employee more industrious and dedicated than
Todd is. It is through his leadership and his example to the greenskeepers
that the course is so well maintained.
sincerely hope that the City of SLO will keep golf affordable. For some
reason non-golfers view golf as a rich mans sport. Such thinking is
definitely not true. Many Laguna Lake golfers are seniors living on
retirement incomes which dwindle in purchasing power each year. Please
don't price them out of sport that can be enjoyed by young and old alike.
Yours truly,
P yllis Sheets
RECEIVED
JUN 2 2009
SLO CITY CLERK
RECEIVED
Robert F. Alderman AN 3 2009
6080 Joan Place
San Luis Obispo, CA 93401
(805)541-4774 SLO CITY CLERK
June 1, 2009 JUN 03 zuuy
San Luis Obispo City Council
900 Palm Street
San Luis Obispo, CA 93401
Re: Laguna Lake Golf Course
Dear Council Members:
Before you make a decision that would affect the future of the Laguna Lake Golf
Course, I would like to point out some aspects that those of you who do not play
the course, or do not even play golf, may not have considered.
1. 1 have played the course with the Laguna Lake Men's Club, a group of
approximately 40 senior men, almost every week for about twenty years.
For the last five years I have also played most Mondays with another
group of about 15 to 20 men. Players in these groups range in age from
late 50 to mid 90. All are able to compete. Some have played golf most
of their lives and others just started playing for the first time in their 60's.
Many would not play at all if it were not for this beautiful and convenient
facility. They simply don't have the stamina to play a full sized course.. As
it is, they have a place to compete, enjoy a great sport, enjoy the
companionship of people that they otherwise would not have met, and
enjoy the out of doors in the beautiful weather we have year round.
Without this facility, some would find it difficult to leave their TV sets, and
would have little to look forward to each week.
2. There is also a women's group that plays each week. It is more than
likely that their circumstances are similar to those described above.
3. Many of our youth, both high school and college students, are able to
play this course when the expense in both time and money to play one of
the full size courses would be prohibitive. To hit the first green with a
drive, or to hit the ball from any of the other tees so that it lands and stays
on the small, elevated greens are challenging goals —even for very good
golfers.
4. The First Tee is a nation wide program that introduces younger
children to the skills, etiquette and sportsmanship that apply to golf and to
life. Some of the older players that regularly play this course provide
volunteer leadership when this program is provided at the Laguna Lake
course. If it were not for the convenient location in the middle of San Luis
Obispo, fewer children would be able to benefit from this program.
5. 1 have seen several families with five or six year old children enjoy a
couple of hours of recreation and teaching, by playing a round of golf at
Laguna Lake. This would not happen on a large course, as it would take
5 to 6 hours and cost $30 to $40 each to play— if the children were even
allowed on the course.
6. The course is beautifully maintained by a dedicated staff that go far
beyond their job descriptions to assure that the course is an enjoyable
place to_be.
7. It embodies two of the 2007 —2009 Major City Goals: Enhance Senior
Citizen Facilities and Open Space Preservation. With the possible
exception of the Daman-Garcia fields, the Laguna Lake Golf Course
probably has more use than any other park in the City.
8. This is a gem of an asset, one that most cities don't have. It sets San
Luis Obispo apart and is a major factor that makes living here so
enjoyable for many of us.
I realize that the City is desperately looking for funds during these difficult times.
Personally, I don't believe that a $1 or$2 increase in price per round would
discourage many of us. But I urge you to keep and preserve this irreplaceable
asset.
Sincerely,
Robert F. Alderman
1490 Descanso #2
San Luis Obispo, CA , 2009
June 3, 2009
To San Luis Obispo City Council Members:
In today's paper I read that green fees for Laguna Lake Golf Course will
increase by $2.00 per round according to the proposed budget. That is
close to a twenty five percent increase! Now is not the time to raise green
fees that much with today's economy.
It is also not the time to raise green fees when many other golf courses in
the area are offering reduced rates. For example: Dairy Creek has
reduced green fees by fifty percent for all women golfers during the month
of June; and everyday, after 11 :00 a.m. students pay only $20.00 for green
fees, a cart and a drink. Black Lake offers unlimited golf for $11 .00 green
fees after 11 :00 a.m. on week days. Unlimited use of a cart is also offered
for $11 .00. Most, if not all, of the 18 hole golf courses in our area offer a
variety of special prices to increase business. Making it more expensive
to"play golf at Laguna Lake, a nine hole course, is not only a hardship on
those who play there, it is also totally unfair.
As a city tax payer I feel it incumbent on the decision makers to find ways,
other than tax and or fee increases, to meet the budget shortfall.
Yours truly,
Pholis Sheets
RECEIVED
JUN 0 5 2009
SLO CITY CLERK