HomeMy WebLinkAbout06/01/2010, B1 - LAGUNA LAKE GOLF COURSE FUND RATE REVIEW council Ndiag Dow 6-I-10
j acEnaa Report "®Nmb. -81
CITY O F SAN LU I S 0 B I S P 0
FROM: Betsy Kiser,Parks & Recreation Director 6-1
SUBJECT: LAGUNA LAKE GOLF COURSE FUND RATE REVIEW
RECOMMENDATION
As recommended by the Parks &Recreation Commission(PRC):.
1. Review and discuss the 2009-11 annual golf fund financial and rate review.
2. As approved by resolution during the 2009-11 golf fund rate review, implement the increase in
green fees of$1.00/round and$10.00/10-play card effective July 1,2010.
3. Authorize additional General Fund transfers of$22,400 for 2009-10 and$64,000 for 2010-11.
4. Conceptually approve the Golf Fund budget for 2010-11 with final action on June 15,2010 with
the adoption of the 2009-11 Financial Plan Supplement.
REPORT-IN-BRIEF
1. Laguna Lake Golf Course (LLGC) hosts an average of 40,000 rounds per year. Largely due to
the current economic downturn and a rainy winter, rounds are down by even more than
projected: staff estimated that they would be down by 12% but they are down by almost 18%
from the previous fiscal year. The decrease in rounds played appears consistent with decreased
rounds played on other public golf courses in the County.
2. Staff assessed the demographics of the clientele at LLGC and found that 48% of the rounds
played by golfers live within the City with another 34%living within SLO County. Because of
the current economic climate, competition with other golf courses, especially 18-hole courses,is
high.
3. Recently, staff was able to complete negotiations with AT&T for a second cell site lease at
LLGC and the annual rent will add over $26,000 (plus COLA) each year to the golf course
revenues. AT&T has also paid its contribution towards the pro shop roof replacement project.
4. Finally, as a part of last year's rate review, Council approved a fee increase of$1.00/round per
player and $10.00/10-play card for 2010-11. This increase will aid in closing the gap between
direct operating expenditures and revenues as directed in the fiscal policy related to the golf
fund.
DISCUSSION
Background
LLGC is an executive length golf facility owned and operated by the City and located within the
City of San Luis Obispo. The course consists of 10 playable holes, a club house, a small !driving
!3 / — /
2010-11 Laguna Lake Golf Course Fund Rate Review Page 2
range, a barbecue area, a putting green, and a maintenance shop. 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. That being said,the LLGC serves a large number of seniors and youth within
the community.
The facility is managed by a Golf Course Supervisor, who oversees two full-time maintenance
workers, 10 part-time staff assigned 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 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. (A compilation of"How are we doing"
forms submitted by golfers over the past year are available to Council in the Council Reading File.)
Pro shop operations are basic and include:
1. Scheduling and starting tee times
2. Collecting green and driving range fees
3. Selling clothing and merchandise,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 five to 17
years old.
Currently, the golf course is undergoing two certification processes. The Southern California Golf
Association (SCGA) has recently visited LLGC and will be providing measurements and course
ratings for providing golfer handicap indexes, which are commonly used throughout the country to
rank golfers. Staff is also pursuing certification through the Audubon Society as a cooperative
sanctuary to enhance the natural areas and wildlife habitats at the golf course and minimize the
harmful effects that daily maintenance operations may present. Two SLO County golf courses are
certified through this program and provide best practices in managing resources and improving
efficiency in maintenance.
Customer Demographics
City Residents. Since April 2009, LLGC has been utilizing a software program to manage golf
course operations. One of the functions is managing the tee times, which provides additional data
on users such as city of residence. Over 6,500 names have been placed in the database since the
inception of use of the program. Residents of San Luis Obispo comprise 40.6%of the individuals in
the database(see notes below on assumptions made regarding how the data was collected.)
City Residents Per Rounds Played_ On average, 40,000 rounds of golf are played at LLGC each
year. The following is a general breakdown of user types and residency from May 1, 2009 to
October 31,2009(these months most closely represent rounds played in a"normal"year):
Player Summary Per Rounds Played.May I to October 31, 2009
2010-11 Laguna Lake Golf Course Fund Rate Review Page 3
Other.
-RegulAr Senior:... YouthStudent_ Users Total Pet
Ci Residents 4,372 2,807 635 869 1,690 10,373 48%
County 2,390 3,177 31 966 969 7,533 34%
Residents
Out of County 21696 607 4 729 27 4,063 18%
Total 9,458 6,591 670 1 2,564 2,686 21,969 100%
Percent 43% 30% 3% 1 12% 12% 100%
Notes on data:
1. Students. Reporting on the student population may be skewed as many customers used
a permanent address instead of a local address.
2. Other Users. The Other Users category consists of rounds given in exchange for
volunteer service,discount coupons and promotional free rounds.
3. Regular Users. Regular users include twilight users and rounds reserved through the
intemet. There is no distinction during twilight hours between regular, student, youth
and seniors..
4. Other. Some assumptions were made in light of missing data; staff utilized phone
numbers to determine residency when full information was not available. With the
ability of cell phones to be used anywhere, staff made a best effort to account for those
without complete information on hand. Results are, at best, a generalization of the
demographics of total rounds played and number of City residents listed in the database.
Overall, it is estimated that 48%of the total rounds played at LLGC are played by San Luis Obispo
residents, while another 34% live within San Luis Obispo County. LLGC is also considered a
tourist destination and an attraction for desert dwellers (who go to more temperate climates during
summer months),but ultimately, LLGC serves City and county residents.
Rate Review Assumptions
The Golf Fund financial and rate review(see Attachment 1)'is based on the following assumptions:
L Golf Play is Down All Over. Golf play throughout the Central Coast remains below
normal and LLGC is not an exception to this trend(Table 1).
Table 1 -Annual Number of Rounds Pla ed at LLGC
Fiscal Year Rounds Percent
Played Change
2005-06 42,600
2006-07 45,600 7.0%
2007-08 40,400 11.4%)
2008-09 actual 42,400 5.0%
2009-10(projected) 35,000 (17.5%)
2010-11 (projected) 37,000 5.7%
2010-11 Laguna Lake Golf Course Fund Rate Review Page 4
As reflected below in Table 2, rounds played at the three public 18-hole golf courses run by
San Luis Obispo County are also down:
Table 2-Rounds Play ed Comparison with County Golf Courses
Chaulk
Fiscal Year LLGC Morro Bay Dairy Creek Mountain
10 holes) (18 holes) (18 holes) (18 holes
2007-08 -11.5% -2.6% -3.1% +0.5%
2008-09 +5.0% -7.0% +1.0% -13.9%
2009-10 -17.5% -24.6% -15.5% -28.1%
Along with region-wide reductions in rounds played, the decline at LLGC is attributed to
several other factors that have had an effect on green fee revenues:
a. Competition for golfers among all private and public courses in SLO County is high.
Some 18-hole courses offered deals that were equal to or less than the fees offered
at LLGC;thereby,drawing golfers away to the bigger venues.
b. Staff believes that the conditions of the greens during the summer months affected
play as maintenance staff dealt with stress and disease issues as a result of low
rainfall in winter 2008-09 and the implementation of recycled water use.
Complaints were received about the appearance and playability of the greens and it
is believed that this had an effect on the number of rounds played. Staff has been
aggressive in addressing the problem by treating the greens with soil amendments to
counteract the effects of increased sodium levels in the water and where possible,
has reseeded with a hardier and more resilient type of grass that will respond better
to recycled water. Staff is working with Utilities to address long-term solutions.
C. During a tight economy, less money is spent on leisure activities. Staff believes this
is a contributing factor to the decline in rounds played as well.
d. Heavy rains this winter resulted in 15 dates where less than 10 people were on the
course. There was only one date the previous year that had attendance as low as this
fiscal year. In addition, the driving range was closed for a few weeks to repair nets
damaged during the winter storms.
e. Staff had predicted a 12% drop in rounds played when the rates increased by
$2.00/round last July. With the increased competition from other courses, the
undesirable appearance of the greens, and an unusually wet winter, the number of
rounds dropped more than anticipated; loss is estimated at almost 18% based upon
revenues through April 2010. Although there was a loss in rounds played, the $2.00
increase implemented this fiscal year has helped to soften the impact on green fee
revenues.
For context, a series of articles published by the National Recreation & Park Association
(NRPA) in January 2010 focused on public golf courses. Some of the impacts on reduced
golf play have come from too many higher end courses, not enough time to play and the
desire for affordable golf. The trend leans towards smaller courses, such as LLGC, where
f3 � -y
2010-11 Laguna Lake Goff Course Fund Rate Review Page 5
customers can get in a round of golf in 60-90 minutes while 18 holes can take golfers 3-4
hours. Public golf courses are often affordable and convenient while meeting the value
needs of their customer base. In an article called"Fairways to the Green,"a simple equation
can be related to golfer satisfaction: (quality of putting surfaces) + (good customer service
experience) + (speed of play) = perceived value [divided by] cost. LLGC strives for all
three components to provide a valued golf experience that is affordable to its customers.
The articles are available in the Council Reading File.
2. Moderate Capital Projects Equipment and infrastructure needs were addressed this fiscal
year,which had a moderate effect on the capital project funding at the course:
a. A new fairway mower was purchased. All key maintenance equipment has been
replaced within the past four years and is now on the fleet replacement schedule.
b. Replacement of the pro shop roof is expected to begin in June 2010; design and
some preliminary work have occurred.
C. In the 2009-11 Financial Plan two capital projects were identified: administrative
software and the replacement of the golf course restrooms. These projects are
estimated to cost$60,000 in 2011-12 and$220,000 in 2012-13.
3. New Cell Site Lease. A cell site lease to add AT&T to the cell tower has been completed.
The annual rent of$26,000 and a $10,000 contribution to the pro shop roof project have
been received. AT&T also added a building to the site with an extended roof to allow
maintenance staff to store equipment and completed the replacement of the barbecue area
trellis cover. As a result of securing the lease and payments, the golf fund revenues are
anticipated to finish the year ahead of 2008-09 by a projected 5%but will be 14%below the
projections given to Council at the mid-year review. Staff is pursuing a third cell site
provider at LLGC at an approximate revenue of$15,000/year (subject to negotiation). A
Request for Proposals(RFP) is being developed for release during summer 2010,with hopes
of installation by 2001-12.
4. Revenue Enhancements In January 2010, staff presented several options to Council to
help increase revenues and bring more golfers to LLGC.
a. Offer an off-peak rate of $10 per round to regular golfers Monday through
Thursday from 12-3pm. The rate was added in February 2010 and, to date, the
program has had little impact on rounds played as it was implemented during an off
peak time of the year. Weather has been a factor since implementation. More time
is needed to evaluate the impact of introducing this new program.
b. Initiate a pilot program to offer an unlimited play card of$109 per month Monday
through Thursday from 12 pm to closing. This program was implemented in
February 2010 and to date, implementation been slow with only a few golfers
utilizing the program. Staff is hoping warmer weather and longer daylight hours
will bring more golfers to the course who in turn, will take advantage of the
unlimited play card,which is scheduled to end July 31.
23
�s
2010-11 Laguna Lake Golf Course Fund Rate Review Page 6
C. Distribute a RFP to secure a food and beverage vendor (with a potential for
alcohol sales). The RFP was released and staff is currently in the process of
negotiating with a vendor. Council will be receiving a report once an agreement is
reached. It is anticipated that the vendor will begin operations by July 2010 (see
number 5 below for additional information on the concessionaire agreement.)
d. Offer a loyalty program to reward frequent golfers Staff has opted to do more
research on the types of programs that are offered at other courses and customize for
the LLGC users before implementing the program.
S. Food and Beverage Vendor. As indicated in Section 4 above, staff is working on an
agreement with Achievement House to provide food and beverage service to the golf course
for the next five years. Achievement House is a non-profit corporation that provides
vocational training for persons with developmental disabilities and has experience with the
City of Atascadero, Vandenberg Air Force Base, and Camp Roberts in providing similar
services. The draft agreement includes $30,000 worth of improvements to restore the
clubhouse to a County Health Department approved food preparation site. The draft
agreement sets annual rent at $15,000 (with adjustments for CPD, with credit for
improvements given for the first two years. With execution of an agreement with
Achievement House, the golf course will see a net increase of$42,000 in revenues over the
5-year term of the contract, while at the same time providing added improvements to the
clubhouse worth $30,000 and enhanced amenities for golfers that will help increase rounds
played.
6. Operating Budget Reduction Options. Staff has proposed $9,800 worth of budget
reduction options for FY 2009-10 and $5,000 for FY 2010-11 to help close the City's 2010-
11 budget gap. These include the following:
Description 2009-10 2010-11
Contract Labor 1,000
Water Service 5,000 5,000
Portable Structures -800
Cost of Goods Sold—reduce food sales 1,000
Merchandise 2,000
TOTAL $99800 $5 000
In addition to these specific reductions, staff is predicting that end-of-year expenditures will
show an additional $22,400 in savings due to operating efficiencies.
Recent Comprehensive Review: June 2009
In June 2009,the Council considered a comprehensive review of the LLGC operations and revenues
(Attachment 2). The Council unanimously concurred with the key findings of that report: that if the
City remains in the golf course business, General Fund subsidies will be required for many years to
come due to course limitations (such as the lack of a full driving range) and the population groups
that it largely services: seniors and youth. Nothing has changed in the last year to alter this basic
conclusion; and the 201041 fiscal review is consistent with these prior findings, /
B ��b
2010-11 Laguna Lake Golf Course Fund Rate Review Page 7
Rate Review Objectives
The objective of the rate review is to establish a fee schedule that maximizes revenue and ensures
the continued operation of a safe, attractive and reasonably priced golf course with an emphasis on
senior and youth services.
As stated in the Budget and Fiscal Policies for Enterprise Fund Fees and Rates:
"Golf program fees and rates should fully cover direct operating costs. Because of the nine-
hole [now ten] 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 operation costs as well. "
Staff continues to address closing the gap between the direct operating costs and revenues. With
measures taken several years ago to keep expenditures down, (such as use of well and recycled
water, leasing golf carts, volunteers to assist in course operations) the course operates on a
"shoestring' budget leaving little flexibility to reduce operating costs. During last year's budget
process, staff presented a two-tiered program to increase revenues at the golf course. For 2009=10,
green fees were increased by$2.00 per round and food,merchandise, driving range and cart rentals
increased by 10%. A$1.00/round increase for 2010-11 was also included in the projections.
Although, the increase in green fees may have contributed to the drop in rounds played, the golf
fund revenues are anticipated to be 5%higher over 2008-09 as a result of the AT&T cell site lease
and its contribution to the pro shop roof project. For the most part, the increases implemented in
July 2009 have helped to keep the golf course on track revenue-wise, despite an almost 18%loss of
rounds played through April 2010.
Fees
Staff is recommending that the green fee rate increase for 2010-11 remain that was approved last
year in spite of the almost 18%decrease in rounds played this year: $1.00/round and $10.00 per ten-
play card. The goal to close the gap between revenues.and direct operating costs and reduce the
burden on the general fund for support to the golf fund is driving the increase.
The already-adopted fees for next fiscal year are:
Laguna Lake Golf Course Fees, Effective July 1,2010
(Changes in Bold)
Current Adopted
Rate Rate
Senior/Youth/Student/Weekdays $9.00 $10.00
(Monday through Thursday)
General Weekdays $11.00 $12.00
(Monday through Thursda
Senior/Youth/Student Weekend $10.00 $11.00
(Fnday through Sunday)
2010-11 Laguna Lake Golf Course Fund Rate Review Page 8
Current` Adopted
Rate Rate
General Weekend $12.00 $13.00
(Fnday through Sunday)
Off-PeakRegular Weekday $10.00 $11.00
(Monday-Thursday 12-3pm)
Twilight Rate(after 3:0 m) $8.25 $9.25
Second 10 holes $6.75 $7.75
Senior/Youth/Student 10 Play Card $82.50 $92.50
General 10 Play Card $97:50 $107.50
Unlimited Play Card(6 month pilot $109/month
program, valid Mon-Thurs 12pm-
close)*
* The unlimited play card is a 6-month pilot program approved by Council in January 2010; the
program is set to expire on July 31. Staff will return to Council with a report on the program and
make a recommendation on the status of the program. If it is decided to continue the program, a fee
recommendation will be made at that time.
With the rate increase, LLGC continues to remain competitive with the two nine-hole courses in the
County:
Pismo State Beach , LLGC Sea Pines—Los Osos
Seniors: $7.50 weekdays Seniors: $10.00 weekdays Seniors: $11.00 weekdays
$8.50 weekend $11.00 weekend $13.00 weekend
Juniors: $7.50 weekdays outh: $10.00 weekdays Student: $9.50 weekdays
$8.50 weekend $11.00 weekend $11.50 weekend
Regular: $11.00 weekdays egular$12.00 weekdaysRegular: $13.00 weekdays
$12.00 weekend $13.00 weekend $16.00 weekend
It should be noted that Pismo State Beach and Sea Pines Golf Courses have additional amenities
that Laguna Lake does not offer, such as a full-size driving range, adjacent restaurant and/or on-site
alcohol sales and ocean views.
History of Golf Course General Fund Subsidy
Staff prepared a"snapshot' of the General Fund subsidy over the past 8 years and projections for
2009-10, 2010-11 and 2011-12:
2010-11 Laguna Lake Golf Course Fund Rate Review Page 9
Golf Fund Subsidy 200 1-02 t
General 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 $36-8,10-0- 26% $95500 _ $113}700 $12;500 $221-,700]
2003 $375,000 25% $92,200 $117,100 $42,700 $252,000
2004 $377700 . 1.4% $51;400 $103,200 $17,100 $171,700
2005 $391,400 18% $69,200 $106,300 $1,400 $176,900
2006 $411700 16% ` : ..$67;400 . $117,100 $70,800 $255,300
2007 $475,800 18% $87,100 $120,000 $143,800 $350,900
2008 $463;300 22% : $100;100 x$1571300 $204,600 $462;000
2009 $529,800 27% $143,900 $163,600 $27,500 $335,000
2010(Estimated) $498,000 19P/
91., $93800 $168,300 $7,800 $279,900
2011 (Budget) _$525,400 20%1 $105;400 $171,700 $0 $277,100
2012. - ° x!$90,400
(Projected) $539;600 , _. 17/0 _. __ _ '_$.176;400 _,.,.$60000 $326;800
*Less prior year carryover
In summary, all indirect costs (general government) and CIP projects historically have been
funded by the General Fund, with direct operating cost subsidies ranging from a high of 26% in
2001-02 to a low of 14% in 2003-04, with an average of 20%. The overall General Fund subsidy
has varied from year to year, largely because of CIP projects. However, until this most recent
economic downturn, LLGC has performed consistently over the years in terms of rounds played
and revenues generated.
CONCURRENCES
The Parks & Recreation Commission reviewed the LLGC Fund Rate Review on May 5, 2010 and
concurred with the assumptions and projections(see Attachment 3-Draft minutes).
FISCAL IMPACT
Based on the rate review assumptions, the following are the proposed operating transfers from
the General Fund for 2009-10 and 2010-11 that will be needed to balance the golf budget. The
mid-year budget review figures were used as the basis for these projections.
Proposed Operating Transfers from General Fund
Variance
Mid YearFavorable
Fiscal Year Budget Review Estimated (Unfavorable)
2009-10 (projected) $257,500 $279,900 ($22,400
2010-11 (projected) $213,100 $277,100 $64,000
For the most part, the additional transfers are a result of decreased green fee revenues, which
were down 14% more than projected at the mid-year review. The losses are consistent with
trends throughout the county for golf play and affected by factors such as an unusually rainy
winter, effects of reclaimed water on greens and current economic downturn.
B �-9
2010-11 Laguna Lake Goff Course Fund Rate Review Page 10
ALTERNATIVES
1. Do not increase the green fees at LLGC for 2010. Given that rounds played at LLGC have
declined by 18% from last year, 6 percentage points more than the projection at the last rate
review, Council may want to consider not implementing the 2010-11 fee increase approved
last year. The cost of living has not increased in this past year and the proposed increases for
2010-11 range from 7.7% to 10.9%. The golf course needs to attract more golfers and
remain competitive with other 9 and 18-hole courses in the area.
With the economy still recovering and less being spent on leisure dollars, private and public
golf courses in the county are offering deals to attract golfers that cannot be matched by
LLGC, and in turn, golfers are taking advantage of deals such as 18-holes for $18 plus free
cart rentals and free beverages or allowed unlimited play for the cost to play 18-holes.
Closing the gap between direct operating costs and revenues cannot be made solely by
increasing green fees. Enhanced marketing efforts, new revenue sources (such as a
food/beverage concessionaire and another cell site lease), reducing expenditures and ways to
sustain and attract new golfers should continue to be considered. The PRC discussed this
alternative and determined that due to the City's current economic climate and the
information pertaining to fees contained in the literature on municipal golf courses, it could
not in good conscience recommend this alternative (see Attachment 3 -PRC minutes).
2. Do not provide the recommended increase in General Fund Subsidy. If additional
funding is not approved, the only way to balance the budget would be to reduce staffing,
which will ultimately adversely affect either customer service, the condition of the greens or
both. These play a significant role in maintaining or increasing rounds played and revenues
generated. As indicated throughout the report, LLGC currently operates on a "shoestring"
budget,with little room for cuts beyond those already being offered.
3. Close the golf course 2 days a week to save on operating costs. Although there are many
courses throughout the country that close due to weather conditions, such as snow and ice, the
climate in California is conductive to year round play. Golf courses typically require ongoing
daily maintenance, such as mowing greens, tees, fairways and roughs. The LLGC is mowed
everyday except Sunday. Golf courses also require daily irrigation and regular scouting for
turfgrass diseases to sustain satisfactory playing conditions. In reviewing the use data, LLGC
does not have any predictable slow days. Play depends primarily on weather conditions. LLGC
has several senior and youth golfing groups, Cal Poly Golf Classes (Mondays & Wednesdays),
Ladies Club (Tuesdays), Retired Active Men (every other Wednesday), The First Tee Central
Coast(Tuesdays and Thursdays), Men's Club (Thursdays),that would be impacted significantly
if closing were to occur. Although rescheduling could occur for some groups, staff does not
believe it would be possible to shift all groups. If we lost any of these groups, overall revenue
would be impacted. Closing the course for 2 days per week would provide a small salary
savings of$20,000 for not having pro shop staff during closures; however, there would be a
revenue loss ranging from $80,000-$100,000 annually($800-$1,000/day x 52 weeks x 2 days),
thereby increasing the general fund subsidy even further.
4. Close the golf course and maintain as park space. After discussions with the City's Public
Works Parks Department, it is assumed it would take 2 to 2.5 FTE (full time equivalent)
B /-/d
2010-11 Laguna Lake Golf Course Fund Rate Review Page 11
maintenance workers to maintain the estimated 26 acres as a park. With an estimated
maintenance cost as a park of$400,000 annually for staffing, equipment, supplies and utilities—
and little in the way of revenue— it would result in a net loss to the City much higher than its
current status as a golf course. Park amenities such as ball fields would not be feasible at this
site due to the close proximity of homes to the property. Other park amenities such as picnic
areas,pathways,benches, tennis courts,bocce ball and play structures could cost up to$500,000
to convert this to a park. In addition, general government support costs would remain, as would
periodic capital improvements. As such, the best comparison is the operating cost subsidy
projected for 2010-11 of$105,400 plus offsetting cell site revenue of$58,000 that would occur
without the golf course($163,400) versus the projected General Fund cost for park maintenance
of$400,000. This results in an increased annual General Fund cost of about$240,000 as a park
versus operation as a golf course. Along with increased costs and reduced recreational
opportunities,the previously mentioned predominantly senior golfing groups, including the very
well attended and successful youth golf program, The First Tee, would have to find a new
home.
5. Contract out golf course operations. This is a practice that many public facilities have in
place and is currently the model used at Chalk Mountain Golf Course(County) and Pismo State
Beach Golf Course(State). Management of the contract would still need oversight by someone
in the City. The City would become the "landlord and still be responsible for capital
improvement costs for upkeep of the infrastructure (such as the pro shop roof, irrigation well
repair/replacement, protective netting, bridge replacement.) General government support costs
would be reallocated to other general fund and enterprise fund programs.
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 4). If profit margins are stressed,it is likely that reductions would
occur at the maintenance level, which is what happened in the 1970's when the course
operations where contracted-out. This would have a significant impact on the course leading to
poor conditions and ultimately unhappy customers. It is possible if this were to occur, the City
could again be left with a facility that would need significant resources to bring back to
satisfactory playing conditions.
ATTACHMENTS
1. Changes in Working Capital: Golf Course Fund
2. 2009-11 Golf Course Rate Review
3. Parks and Recreation Commission Draft Minutes
4. Letter from County Golf Superintendent
COUNCIL READING FILE
1. Articles from NRPA—Council Reading File
2. "How are we doing" forms from past year
T:\Council Agenda ReportsTarks&Recreation CAR\Golf Course Rate Review 09-10\golf fund rate review 09-IO.doc
Attachrnani �-
a OO O o C 0 0 0 O 0 0 O O O 0 0 0 O O O
0 0 0 0 0 0 O O O O C C O 0 O O VA
.. (D M 0 -- 00 00 0 vi to N -- en en 00 0 00
V 'M.t .-. tz lz V1 .-. 00 �c V1 N C7 �c V1 toM -- N
N .-- N •r •� �c 00 V) to kn .-+ K
L N eV
Oi
a M o 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
d .. 00 O 000 00 0 00000 0 0o ds
0 00 0 -- r o O C 10 c� Nv, O e v, r- 00
dN, r" o v .= o V v Wn v ooto o oa'
p r M N N ON V1 00 M N to r- .- N
L N M R V1 l� N ON V' v
0.
a N
00 o 0 0 0 (D O 00000 O 00 O O O
O O O o 0 o O O O O O O O O O O GM
V O V) O -- �c V O b �c 7 0 0 0 00 C R'
M to c�
~ N -- N to M
V N M 7 V1
w
..
0 0 0 0 0 0 0 0 0 0 0
w : 00 0 000 0 0 000 0 0 0o um
o en o ..• un ao o n v r- ..-• .� .- � �
00 � 00 M M %K P r- M M
V) ON N - N N N t- O ON r- t-
N
a O O O 0 0 0 0 C C O O O O O O O O O O O O O
O O O O O O O O O O O O O O O O O O O on
00 �c O 00 r- w O v N O M MC� N D\ O�
CWC V1 O� V O M -- 00 O O 00 00 �O 00 W O�
G O V1 N
Z' N N r� N N
W
D y 0 O O O O O O O O O O 0 0 0 O O O O O O O O
Z w .ti O O O O O O O O O O O O O O O O O O Cl to
00 ut O n O O trt �c V VI N eh ..- vl to ... ...
�- p 00 Vi O �O M 'T V' M. O �c O 00 00 � to r- h -+
U. Qa• O Vt O N ^- N ^ ^ Z en V1 � m 00 00 N N � �cN
W
U)
O O O O co O O 00 O O O O O O O O O O O O O
V y O O O O O O 00 O O O O O O O O O O O O
l� -+ M -+ V1 O Q� M O� 00 �D R h .� O
V p M m -- to O N'N to M M M O Q to M 00 m O ...I
J ' N N N N ... .-- N --� t0'1 h � .~ 000 M M
O
O
rz
J
a
a w
a U_
'n R
E d
Y x c o ° u d O_ 0o ami
awi �' cc
r u E 61
E .c aci L' G o0 - o
V w _
a ° o E E S ,c ° n° L as
Z o W awi V - c U v U ai d m 0 > W w c R ¢ = 07 W
c ►1 �o v re ca o z > o a Q .7 E V) r m is
m o c c u 4 U C7 O n H F" �, O .. o e
V) E sw ru � - o � CY. 0u L' EW u 00O a y a a
IJJ °� h N U v '� A o w L .c w ^� w i :c A C d r 04 U U
Z C7 U �IOoL sF. 7 E .aC7 D. E- z M !: c 4
a > X rL R7 A.. L
_ � �
EnO aO U = O W cc > a Lo Lo
L) a w o a 2 3 3
2-
Attachment o2
Counat Wmi"D` 6-11-09
j agenda REpoRt PIA I
CITY OF SAN LUIS O B I S P O
FROM: Betsy Kiser, Parks&Recreation Director d)
Linda Fitzgerald,Recreation Manager
SUBJECT: LAGUNA LAKE GOLF COURSE FUND RATE REVIEW
RECOMMENDATION
As recommended by the Parks&Recreation Commission:
I. 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
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)fora 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.
3( -l3
AttachMeflt.�.
Laguna Lake Goff 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 isalso 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 folly 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 becomesone 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
� ( -iy
A tac9YE8 antfp®.
Laguna Lake Golf Course Fund Rate Review. Page 3
seven years. 1n 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.
X
.3 ( - 5�
- ' � .ttechment
Laguna Lake Golf Course Fund Rate Review Page 4
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 o other o Youth
80 and several are in their 90's. The
10% r 7%
senior men's and ladies' clubs meet a Regular
weekly at the course, as do the residents erg% 1s %
of The Village at the Palms assisted
living facility; the Retired Active Men's
Club;, The Newcomers' group; members ❑student o 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 Gold'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.
Attachmant.2.
Laguna Lake Golf Course Fund Rate Review Page 5
2. Adding a 1011: 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&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 Controkpoint of SalelOnline 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.
Laguna Lake Golf Course Fund Rate Review Page 6
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:
"Golfprogram 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 apart 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. UGC has succeeded,however, in having the
highest direct cost recovery rate of all recreation programs associated with facilities that are
provided by the City.
31 - 18�
Attache tent a
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 per Attendee Com arison for CityRecreation Facilities
r llap'gn Garcia Ludwick .: '
Aquatics S06Eields Community
Go1PCourse OpeYet�ons OpetahOns& ` Ceuter•.
Operations and Swim Parks'.; Operations&
and _ ,Center i MaigCe6ance B'uiidirig
2007-08 Maintenance:._ M9intenance. m °`' Maintenance
k. '".f�i.. 'Y
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 :::::S:382]
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 I Oh
"Attar-hMOnt-a..—
Laguna Lake Golf Course Fund Rate Review Page 8
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 PlayedatLLGC
Fiscal Year Chan qunds-PW �.
a�*COftrm
2004-05 40,700
2005-06 42,600 4.5%
2006-07 45,600 6.6%
2007-08 40,400 (11.5%)
2008-09(projected 42,700 5.2%
2009-10(projected) 37,600 1 -12%
2010-11 (projected) 37,600 1 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. FY2010-11. 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 #3 reconstruction, barrier netting replacement, irrigation control system
improvements, and installation of the bridge at Hole 46. 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 restroonis 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
�04�
Attachment.a
Laguna Lake Golf Course Fund Rate Review Page 9
2008-09. In February 2009,C1earWire 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 2009-11. 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 'V2 ears.
Operating Materials& Fewer supplies needed 600
Supplies
Machinery&Equipment Minor capital equipment has been reduced 14,000
due to recent up9eges
Tn.tal Iteducttctns•;.� I , - � '.'': �.,.. :��,..,.k.. ... :':�, . :` ::�1`8 9'00;.
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.
$r -a�
Attachment a
_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 theflight 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 food/beverage service area with banquet and/or outdoor seating
AIMChnhis Ont OR
Laguna Lake Golf Course Fund Rate Review Page 11
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 2010-1.1.
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:
Laguna Lake Golf Course Fund Rate Review Page 12
Laguna Lake Golf Course Fees,E ective Jul 1 2009 and Jul 1, 2010
Current Propos d 2009 :Pro osed"2010
1st 2nd tat Zn
10-Holes 10-Holes 10-Holes 10-Holes . 1'104!66' 110,161es.
Senior/Youth/Student $7.00 $4.75 $9.00 $6.75 . ' "'.Iiiyloo lsli5
Weekdays M- Th '.
General Weekdays $9.00 $4.75 $11.00 $6.75 $ 2:OQ Tr7r?5;;
M- Th)
SeniorNouth/Student $8.00 $4.75 $10.00 $6.75 $ 100 s$775.
Weekend F-Sun)
General Weekend $10.00 $4.75 $12.00 $6.7513:Q0 x$7.75
(F-Sun) -
SeniorNouth/Student $62.50 $82.50 $9 50 j ;.a' ;`
10 PlayCard
General 10 Play Card $77.50 1 $97.501 $ Il'150:
Twilight Rate $6.25 $8.25
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
B 1 ��
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.
3 i -as
L2—
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:
Proposed O erating Transfers from General Fund
Mid Yeati .Ehddf^3��ar ' Fagdgable'.
Yeas St3trttied ' r,;: _.favorable
2008-09 $316,500 $293,900 $22,600
2009-10 $309,300* $283,700 $25,600
2010-11 $207,200 $o
*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 is
Golf Fund Subsidy 2001-02 to 2010-11
General 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
Q02, 77 P68,100 70
0 5 V.
2003 ,$375,000 25% $92,200 $117,100 $13,300 $252,000
'�PQ "�' 'd.. AW"I - M- MT,N
zona $117$117, .0 NQ
2005 $391,400 19% $74,300 $106,300 $1,400 $176,900
Z,
2007 $475,800 18% $87,100 $120,000 $17,400 $350,900
.$463;r3Q0 2*o 96
2009(Estiniated) $518,900 27% $140,400 $163,600 $130,600 $293,900
V
2QIQ'Oudgit)
.$524.400 S�o ; "o [" . 96N,
X _ , !--4, ..'_ , 0i 0
1201 i(Budget) I $539,8001 6%1... $34,100 $173,100[1 $0 $207,200
In summary, all indirect costs (general
government) and CIP projects historically 30% Goff Fund DirectOperating CostSubsidy
have been funded by the General Fund,with 2
direct operating cost subsidies ranging from 5%
a high of 27% to projections of 9% and 6% —T
in 2009-11. The overall General Fund 15%
subsidy has varied from year to year, largely io%
because of CIP projects. However, LLGC 5%
has performed consistently over the years in 0% 41
terms of rounds played and revenues 2
generated.
Fiscal Year Ending
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 efficitintly as it can perform. Mffle 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.
V7L`m h tl
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 Morro 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:
Maidte��nGC -,� �� e�Afi0ns'
Staffing/Fringe $276,100 $69,100
Materials/Supplies $149,300 $52,200
Expenditure Total $425,400 $121,300
Revenues $311,100 1 $76,300
Net $114 00 $45,000
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.
�� fJ Y�l1Vl��Y���OUV
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 thew 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
TABudget Folders\2009-11 Financial Plan\Enterprise Fund Working Capital[W.Golf\CAR—2009 golf fund review-final 6.11.09.doc
41
8 � $ 8 � s V, 'iA,CHMENT
O+ m O N m No b %0 O Vi
Q m VI h N 00 n N
V `-' N
O O ova
M O� Wp) D C cn cn e� 00 pvp�
O O N '�t IOn� vNi N vbi r tV'I m O
N 0. M VI in .• n N N
c $ g o g g g g g g g g g g w
O O\ r- O� 00 N m ri N_ N 1� M M
N a h M V1 h to •{`-� t� h N N
V SS s $ S S S O � O S S O S O C w
O0 vI 00 .-� c+i t V 7 b M en
N a U'S M t~+1 b 7 VNI ti b 00 eV
E °° N m v p`p�pp 0D 000 m " a ° c
w v
O
� �
(L w o vI N co r- N In r t-
O 00 b O7 VI V K �6M O_ A`MQ O O
W N �. 00 N N V) '�Q h b n 00 M !�I v d'
,^ v
LL
O
Q ;, _
0
J rt � e (0 N e g g % s gg O g g r-
O 8 V N N a Os en M I� O r- n u'1 Vi 00 (7 O
-� N M V b b vI N V b b �p M l-
..' NI V '+ b N 00 V V �•' .. �
J .
Q
H
a
U `
d
U c
Z_
Y a to c Z o
Q r c "
O dd
v E co f O wo ^ C O
9 °°�° > c U UP d ° y ¢ d O Cl w
Wo s ti m ti w F ^ W Fon 3 O cc A A
V V V
Q za � oF C q��jc� jg�+ H 8
T
V
� t 30
I
ATTACHMENT
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 I vendor
Pro Shop Yes Yes Yes Yes Yes Yes
Food/Beverage 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 I sized sized
Other Lodging Has location
adjacent to for weddings,
course owner is
upgrading
clubhouse to
accommodate
wedding
parties
-7N
)3t -3 �
LEISURE, CULTURAL & SOCIAL -
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
'ice �
UTACHMENT 1�
SOCIAL
FLEET REPLACEMENT—MOWER FOR GOLF COURSE
Project Phasing and Funding Sources
Project Costs by Phase
Project Costs
Budget-to-Date 2009-10 2010-I1 2011-12 2012-13 1 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
'33
TrACHuIENT At
CULTURAL
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 Reading at 11-01-08 4445
xRi'"liic`e'MhW'niTelin
Target:Years/Hours 7/5000
Projected at Replacement: 9/5000
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 $25,600
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. Xis with
great appreci -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
Jy► ' cam'
81 - 3S
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,
CIP 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 3rd 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
—A M'�ery• �_
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)
31 --3
;�;:;ctirrEr
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
Di 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 r 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
will 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 gh 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 programreductions, h a loss of 7.06 FTE and
proposed revenue increases of$123,200 for FY 2009-10. Budget easings 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 _ 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..,
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
ihentig@co.slo.ca.us
Or--fi4
Bt -3?
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
1" 10=hole tad 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 Sunda
General Weekends: $12.00 $6.75
(Friday through Sunda
Senior/Youth/Student $82.50
10-Pla Card:
General 10-P ay Card: $97.50
Twilight Rate: $8.25
SECTION 2. Effective July 1, 2010, green fees shall be as follows:
LAGUNA LAKE GOLF COURSE FEES-2010
1" 10-hole 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 Sunday) >5�
/-7
Resolution No. (2009 Series) a P .,.
Page t �1� er(; 9n���� �
General Weekends: $13.00 $7.75
(Friday through Sunda
Senior/Youth/Student $92.50
10-Pla Card:
General 10-Play 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
APPROVE AS TO FORM:
Jonathan P. Lowell, City Attorney
T.•IBndget Folder.0009-11 Flttmnaat PtanOterpriu Find WakingCiviiaM.Go"emtutiai-LLGC IOo9.D0C
8r -�l
- Flrr„cHAIENT
Parks and Recreation Commission Minutes
May 5, 2010
Page 6 of 10
7. Laguna Lake Golf Course Fund Rate Review—Kiser
Director Kiser provided a PowerPoint presentation on the Golf Course Fund Rate Review.
The objective of the rate review is to establish a fee schedule that maximizes revenue and
ensures the continued operation of a safe, attractive and reasonably priced golf course with an
emphasis on senior and youth services. Staff continues to address closing the gap between the
direct operating costs and revenues. With measures taken several years ago to keep expenditures
down, the course operates on a "shoestring" budget leaving little flexibility to reduce costs.
Explained reasoning for rounds being down as illustrated on "assumptions" chart. Also noted
online fee program helped raise awareness of demographics of golfers (40% of which are SLO
residents).
Golf Course Supervisor Bunte and Director Kiser provided a comparison with competing
County courses and discussed economy and assumptions, including RFP for another cell site
lease. Director Kiser added RFP for concessioner under City Attorney review. Goal is to
cover direct cost
Based on assumptions, staff recommendation is that the green fee rate increase for 2010-11
remain what was approved last year ($1.00/round and $10/ten play card) The goal to close the
gap between revenues and direct operating costs and reduce the burden on the general fund for
support to the golf is driving the increase.
The recommended fees for next year were explained from the graph included with the staff
report.
Alternative is to not increase the green fees at LLGC for 2010. Enhanced marketing efforts, new
revenue sources (good/beverage concessionaire and another cell site lease) and ways to sustain
and attract new golfers would continue to be considered.
Proposed operating transfers from general fund were discussed. General Fund transfers would
be $7,400 for 2009-10 and $49,500 for 2010-11. Director Kiser informed the Commissioners
that these were preliminary figures and would change as we approach the end of the year and
have more definitive numbers.
Commissioners reviewed and discussed.
Chair Kincaid inquired as to ramifications of general fund transfer if increase was not
approved. The general fund transfer would increase.
Commissioner Regier discussed projecting increase in rounds played for next year, economic
recovery, as well as possibility of a one-year delay in fee increase. Discussed further with
Supervisor Bunte likeliness of seeing growth in courses such as LLGC with regular repeat
users. Clarified Council approval. Feels there is a growing awareness of City's financial issues
and an understanding that subsidizing may not be able to continue; however agreed discussion
on that situation and comparisons to the swim center should be at another time.
1-6
Arr'kMvIEnr�—
Parks and Recreation Commission Minutes
May 5, 2010
Page 7 of 10
Commissioner Davis discussed impacts with Supervisor Bunte.
Commissioner Whitener.asked for more detail on expenditures such as staff costs, equipment
purchases, water and supplies. Director Kiser explained operating costs and indirect costs.
Supervisor Bunte will breakdown into more detail for the Commissioner. Also discussed other
reasons besides weather for rounds being down, including same number of golfers and number
of new courses available since 2007. Commissioner Whitener also discussed concerns for being
priced out of market.
Chair Kincaid discussed unknowns of future, expressed appreciation for excellent condition of
greens, possibility of increased utilization of driving range, and examples of looking beyond golf
for other uses of course.
Chair opened for Public Comment.
Carolyn Smith, San Luis Obispo. Thanked staff and Council for fixing Hole 3, has no more
balls going through window of house. Concerned for increase. In 30-years residence there has
seen large array of age groups using course and youth completing first tee program playing later
with parents. Concerned over possibility of losing course and begs Council to keep it. Asked if
course could be removed from enterprise fund and become funded and viewed as a park (general
fund). Asked PRC to appeal to Finance Manager or CM to keep. Asked how she or a group
could approach the City Council to make this recommendation.
Chair Kincaid agreed and noted the PRC has sent messages to Council previously as its
existence as a golf course is a continual threat..
Director Kiser stated she would make City Manager aware of view and suggested appearance at
June 1,4:00 p.m. Council meeting.
Supervisor Bunte noted indirect and capital improvement costs would still be involved either as a
park or if leased.
Commissioner Hensinger added that as an enterprise we have received a proactive course, would
argue other facilities would have increased incentive if were also under enterprise funds. In this
way the LLGC serves its community well..
MOTION: (Hatch/Davis)
1) Support the assumptions of the golf fund rate review and recommend that Council
implement the increase in green fees of $1.00/round and $10.00/10-play card as
approved in the 2008-09 golf fund rate review, effective July 1, 2010.
2) Recommend additional General Fund transfers of $7,400 for 2009-10 and $49,500 for
2010-11.
Approved: 7 yes: 0 no: 0 absent
E/ -V3
1-7
i
Ar=iloAWT—
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
iheotig@co.slo.ca.us
RECEPv!E®
JUN 0 3 wo
'e SLO CITY CLERK
.IL
kLl
L
14 20`46 W—fe I �-Fa--
i� tJl-,4-j4* 6rL� �as Osas /�jJ�/2
May 24, 2010
kplvw�-&z2e5-P6A --1uz3 RECEIVED
':L.T� JUN 0 3 2010
SLO CITY CLERK
SLO City Council C[-rq / 44-(z--
ks,-. nvt �LG2
To Whom it may concern, c
Please do not take away our Laguna Lake Golf Course. My friends and I
come to play this course one or two times a week. We really enjoy playing
there and there are so few small courses available to us.
We come from different parts of the county and when we play we also shop
and have lunch. This is bringing sales to the businesses in San Luis Obispo
as well as bringing income through the fees we pay at the course.
We also notice there are many seniors playing this course that may not be
able to play a longer course and it gives them a wonderful chance for
exercise , fresh air and companionships
This is better than a park and you collect fees also. Thank you for listening.
Sincerely,
Hello! My name is Joan Scholz, I'm a 40 year resident of San Luis Obispo,
and I'm here to tell you why Laguna Lake Golf Course is important to me. I
am a survivor of a massive aneurism of the brain. I am one of 2% survivors
to enjoy life to the fullest following the experience. It was a bul9e on the
vein in the brain the size of the end joint of your thumb. I owe a lot of my
rehabilitation to being able to walk the Laguna Lake golf Course weekly. I
play 20 holes twice a week and find the walking & playing a game much
more interesting & stimulating than walking around the blocks by myself
daily. It is a small enough course that I can walk it. If I played any of the
18-hole courses, I would probably have to rent a cart to play. Then, it
would be a game of "hurry up & wait," which defeats the purpose of
exercising! (Plus, one has to be aware that hard balls are coming from
behind!)
We feel very lucky to have a lovely 10-hole executive hole course to play
golf at, which is so well taken care of by the staff. It is very well overseen,
groomed and cared for by Todd Bunte. His staff is very efficient, & friendly.
It is a lovely course, scenery-wise, and all ages are very welcomed to play,
and do. We have 2 91-year olds in our club who are very active. And I
know that a wonderful program exists for the little children, known as "First
Tee." The college students from Cal Poly & Cuesta use the course for
classes, as well as study breaks. And there are many groups of retired
men & women who use the course weekly.
I also notice that its location to the Middle School is very popular with the
parents of those students - they prefer to drop off their children & let them
walk across Eos Osos Valley Road with the signal, rather than becoming
part of the traffic mass at the school itself.
Golf is enjoyed as a life-long sport, like swimming, and we feel extremely
fortunate that we live in a city which supports such a healthy activity for its
citizenry. To eliminate this wonderful opportunity would be a travesty to the
citizenry of San Luis Obispo.
Thank you for listening to me.
/TIDE n4- (.pl2�Z� ort
From: Carolyn[SMTP:KE6HNG@ATT.NET]
Sent: Saturday, May 29, 2010 6:51:46 PM RECEIVED
To: Council, SloCity
Subject: Laguna Lake Golf Course-June 1, 2010 Agenda Item (4:00 p.m.)
Auto forwarded by a Rule JUN 0 2 2010
SLO CITY CLERK
Dear Mayor Romero and Council Members:
This letter is in reference to the Laguna Lake Golf Course (LLGC)
review on your June 1st 4:00 p.m. Agenda.
I have spoken to you before about my feelings regarding the LLGC
being moved out of the Enterprise Fund but was told it wasn't the time
to bring up the subject. I'm hopeful now is the right time.
I believe the LLGC should be removed from the Enterprise Fund and
put back in the General Fund, where it previously existed. I feel LLGC
is a park, like any other park in the City, that serves the recreational
needs of seniors, students, families, and youth. It makes no sense to
me to treat the golf course differently than the other parks. Bill Statler
indicated at a City Council meeting approximately a year ago that
having LLGC in the Enterprise Fund is in accordance with standard
accounting principles because it collects fees from its users and is in
competition with other courses in the county. Sinsheimer swimming
pool collects a fee from its users and is in competition with other
swimming pools in the county, both private and public. It does not pay
for itself and it's my understanding the General Fund contributes much
more to the pool's support than LLGC. I would like to know why these
two City recreational facilities are treated differently? This different
treatment gives the appearance of favoritism of one sport over
another.
Because LLGC is in the Enterprise Fund, nearly every year users and
supporters have to plead with the city to continue to subsidize the
course and allow it to remain open. Continual reviews over the past
several years have created a feeling of impending doom over the
course. This has made some supporters less than enthusiastic to
financially contribute to the course with fund raisers, cash donations,
etc. They are reluctant to take a chance on wasting their time, energy
and/or funds on something that is continually on the chopping block.
It's a pity that there are citizens who want to contribute to supporting
the course but are discouraged because of the constant uncertainty of
the future of the course.
I appeared before the Parks & Recreation Commission meeting in May
and suggested moving LLGC out of the Enterprise Fund. The general
consensus I gleaned from them was that they were in support of such
a move and had in fact made this request previously to no avail. While
I and other supporters appreciate previous statements made by
several current Council members that they support keeping LLGC
open, there is no reassurance that future Councils will feel the same.
Therefore, I hope you will consider the possibility of moving LLGC from
the Enterprise Fund back to the General Fund for the benefit of your
citizens who enjoy the course as, in many cases, it is their only
opportunity for exercise and sporting enjoyment.
I believe Todd has done a great job in generating more revenue for
the course and in this economic atmosphere, that has not been an
easy task. However despite his efforts, it is my understanding that the
course is needing more General Fund subsidy than anticipated during
the budget process last year. Apparently, this is partly due to the
increase in round rates creating less rounds being played. In
considering another rate increase, I hope the Council will consider the
primary goal of the course which is to "operate and maintain a safe,
attractive, and reasonably priced. recreational facility with emphasis on
senior and youth users." If rates are increased again, I'm afraid that
the course will be less affordable for many of those it was created to
serve.
Thank you for your time. Carolyn Smith
May 24, 2010
SLO City Council
To Whom it may concern,
Please do not take away our Laguna Lake Golf Course. My friends and I
come to play this course one or two times a week. We really enjoy playing
there and there are so few small courses available to us.
We come from different parts of the county and when we play we also shop
and have lunch. This is bringing sales to the businesses in San Luis Obispo
as well as bringing income through the fees we pay.at the course.
We also notice there are many seniors playing this course that may not be
able to play a longer course and it gives them a wonderful chance for
exercise , fresh air and companionships
This is better than a park and you collect fees also. Thank you for listening.
Sincerely,
i
RECEIVED RECEIVED
JUN 01 1010 JUN 01 2010
SLO CITY CLERK SLO CITY CLERK
May 24, 2010
SLO City Council
To Whom it may concern,
Please do not take away our Laguna Lake Golf Course. My friends and I
come to play this course one or two times a week. We really enjoy playing
there and there are so few small courses available to us.
We come from different parts of the county and when we play we also shop
and have lunch. This is bringing sales to the businesses in San Luis Obispo
as well as bringing income through the fees we pay at the course.
We also notice there are many seniors playing this course that may not be
able to play a longer course and.it gives them a wonderful chance for
exercise , fresh air and companionships
This is better than a park and you collect fees also. Thank you for listening.
Sincerely,
RECEIVE®
JUN 012010
SLO CITY CLERK
council mcmoizanbum
t�D C0 (tiiJ/�-/L
I �; COUNCIL C�CDD DIR
� ecrry � FIN DIR
TO: City Council A4001,ffFIRE CHIEF
f`{ f�ATTORNEY ff PW DIR
VIA: Katie Lichtig, CM E [!r_CLERK/ORIG (POLICE CHF
❑ DETEAD5 ZIREC DIR
f d o CIUTIL DIR
FROM: Betsy Kiser, Parks Jd Recrea.iion Director 2� Z-HR DIR
� ff/E�TIf7J� �Cs72f/�L
SUBJECT: Council Members Request for Clarification and Additional Information �0_`r`'t x116
Regarding the Golf Course Rate Review
Staff was asked by Councilmember Marx to provide clarification on several of the alternatives
provided in the Golf Course Rate Review. In addition, Councilmember Ashbaugh also requested
additional information regarding questions he assembled for the review. Please see responses
below:
Councilmember Marx's concerns:
1. With regard to converting the golf course to a park provide, clarification on staffing
comparisons and if the $400,000 estimate to maintain a park was in addition to the cost
of maintaining this site as a golf course?
Public Works estimates it would take 2 to 2.5 full time equivalent staff members to
maintain the area as a park. Currently,the golf course has 2 maintenance worker full time
equivalents and a golf course supervisor, who oversees the operation of the course. So,
full time equivalents look very comparable. The$400,000 estimate for park maintenance
is not in addition to the cost of maintaining this site as a golf course, rather it would take
the place of these costs. By comparison,the direct operating and maintenance cost for the
golf course in FY 2010-11 is $525,400 (page B-12 of the agenda report). Considering
that the Public Works cost of$400,000 is just for maintenance,while the golf course cost
of$525,400 includes maintenance and operations, the cost comparisons seem reasonable.
So, why is it less expensive to operate as a golf course, when costs are$125,000 higher
than operating it as a park ($525,400 vs $400,000)? Because there are $425,700 in
offsetting revenues as a golf course and there would be no similar offsets as a park.
2. Shouldn't the alternatives include selling the land or using it for affordable housing?
We could consider non-park uses for the golf course,but before doing that work, we
would need Council direction to do so,because depending on what Council would like to
see, it could be a major work effort. Such direction would best be tied to the
development of the 2011-13 Financial Plan.
RED FILE
MEETING AGENDA
DA g/� /O ITEM #
Councilmember Ashbauah's questions:
3. Are there any courses—anywhere - that feature a "bad weather discount?"If so, how
does it work? Could we,for example,provide a discounted rate on any date when John
Lindsay is forecasting high temperatures less than, say 60, and/or wind speeds greater
than 25?
Currently, staff knows of one golf course that offers a"rainy day"discount. Recently,
Avila Bay Golf Course began providing a`rain check"program whereby if it is raining
hard enough to effect play or business, an individual can call in for a`rain check". The
discount includes four(4)rounds of non-transferrable golf for the individual requesting
the`rain check"for$70.00, or a 75%discount. Other local course managers have
discussed this type of program,but Avila Bay is the only course to have implemented it
thus far.
4. Is the forthcoming agreement with Achievement House going to include an on-sale beer
and wine license? Will Achievement House provide staff for the food and beverage
concession? What in general is included in the potential$30,000 improvements to the
Club House?
Yes, beer and wine sales are included in the agreement, pending approval from the
Alcohol Control Board. Achievement House will provide an onsite skilled food service
job coach and all food service staff for the operation of their concession. Site
improvements include flooring, installation of four(4) required sinks, exhaust hood,
lighting adjustments, FRP to walls, electrical upgrades and painting. Appliances include:
ANSI refrigerator, microwave, griddle/oven, fryer,popcorn machine, and a refrigerated
beverage container.
5. If I am reading it correctly, last year we experienced a 14%decrease in green fees
(projected at$259,000 v. budget estimate of$300,000). This decrease is a result of the
17.5%reduction in rounds mitigated by the higher per-round fee for most rounds. All
other course revenues (cart rentals, driving range, etc) are basically a function of that
critical index of total rounds played, and experienced similar declines. What assurance
can we have that another 10%rise in the green fees would not result in even fewer
rounds played?I'm concerned about that possibility, and personally 1'd rather we defer
at least six months another raise in the green fees—at least until we have experienced
another six months of mostly good-weather play, to see if there is evidence of a return to
a higher level of play.
There is no assurance that another 10%rise in the green fees would not result in even
fewer rounds played; however, the reduction in rounds played can be attributed to a
number of factors in addition to the increased fee(i.e. poor green conditions,
exceptionally rainy winter, economic downturn, competition from other courses, etc.).
The extent that each of these played in last year's "perfect storm" is hard to measure.
6. Alternatively, we might consider a smaller, "gentler"increase in fees. 1 know it's our
current resolution to increase the green fees to the rate schedule shown on p. Bl-7 and 8,
but if we do decide to go forward with a July I increase, I would like us to consider a
smaller rise in these fees, say along the following lines:
Current Rate Adopted Rate Possible"Gentler"
Option
Senior/Youth/Student/Weekdays $9.00 $10.00 * (no change)
(Monday through Thursday)
General Weekdays $11 .00 $12.00 $12 (same)
(Monday through Thursday)
Senior/Youth/Student Weekend $10.00 $11.00 * (no change)
(Friday through Sunda
General Weekend $12.00 $13.00 $12.50
(Friday through Sunday)
Off-Peak Regular Weekday $10.00 $11.00 * (no change)
(Monday-Thursday 12-3
Twilight Rate(after 3:00pm) $8.25 $9.25 $9
Second 10 holes $6.75 $7.75 $7
Senior/Youth/Student 10 Play $82.50 $9250 $90
Card
General 10 Play Card $97.50 $107.50 $100
Note that the above suggestions (right-hand column) would maintain the rates for seniors,
students, and youth, and for off-peak M-Th 12-3 p.m. golfers. It would also"round off'
the costs for the 10-play card.
Council could certainly consider either not implementing the fee increase approved last
year, or some hybrid of the proposed rate increase. Again, as stated above, the reduction
in rounds played was not the result of fee increases alone,rather the result of many
factors. If any one of these factors changes in the coming year,we could see rounds return
to regular numbers (40,000/year). However, if the fee increase is not implemented and
rounds only increase this next year by the conservative prediction of 2000 rounds, a
higher General Fund subsidy will be needed to balance the golf course budget.
1490 Descanso#2
San Luis Obispo, CA 93405
May 25, 2010
San Luis Obispo City Council Members ^►
City Hall R E C E I +
990 Palm
San Luis Obispo, CA 93401 MAY 2 5 7010
Dear Council Members: SLO CITY. CLERK
Just about a year ago I was one of many who contacted you by mail, email, telephone,
or in person to urge you not to increase, by about twenty five percent, the green fees at
Laguna Lake Goff Course. However, four of you voted for the increase because the
revenue was needed. Now, a year later, you want to again raise green fees. Did the
raise increase the revenues? No, green fee revenues were decreased because the
raise resulted in considerably less play.Another raise will cause further decreases in
play.
Not only has the economy decreased play, but all the 18 hole golf courses in the area
have held the line on green fees and offer great specials making it cheaper to play a :
regulation golf course than to play Laguna's executive course. It only stands to reason
that when you can get twice as much golf for less money, many golfers are patronizing
the 18 hole courses.
I am a golfer and have worked part time at the golf course for almost twenty years.
During that time, play at the course has dwindled each time you raise green fees- an
annual occurrence. I find it difficult to understand why the golf course is expected to be
self supporting yet my tax dollars go to maintain such places as city parks, bike trails,
youth sports fields, tennis courts, swimming pool, and even the PAC.
San Luis Obispo is a tourist town and many tourists are golfers. Laguna Lake Goff
Course is a real jewel—beautifully maintained by three dedicated city employees. I believe
everything should be done to attract tourists to this course, not price us out of the market and
send tourists to the other courses in the county.
In closing I urge you to NOT raise green fees again.
Yours truly,
�YMi �P E�vl�r�
P! IIS Sheets EeCOUNCIL [37-CDD DIR
LTL;At erri1 f4rC [I'-FIN DIR
0'AQAeA55;-"/VQ-Z'FIRE CHIEF
R'ATTORNEY LVPW DIR
a'CLERWORIG [ErPOLICE CHF
RED FILE F] DEPT HEADS 13'REC DIR
MEETING AGENDA � CrUTIL DIR
(SHR DIR
DA b /o ITEM #
'erry n4
CmP` (L
Elaine Henfling t��OUNCIL 2" DD DIR
P.O. Box 2499 RED FILE rTc90 arm mcJL (�IN DIR
Avila Beach,CA 93424 _ MEETING AGENDA ` ""''^' F- M
R�C IEF
gttOANEY W 031A
6A Jo ITEM # 81 p 1 DEPT
�10�OMF
rl mEAD® A r�iR
—p� fiiL DII�
May 27,2010 �-_.___ �• FHA bA
� N(�T�s �CtnctaC(t_
�`1 mGK
San Luis Obispo City Council CL&RK-
990 Palm St.
San Luis Obispo, CA 93401
Dear Honorable Mayor and City Council Members,
This letter regards the upcoming June 1, 2010 Council Meeting's consideration of the
approval of the golf fund at Laguna Lake Municipal Golf Course.
It is my deepest hope that the council will see fit to continue its support of this much
needed and much loved community resource.
As a year-long member of the Laguna Lake Ladies Golf League and now acting as its
treasurer for the upcoming year, I would like to say that this course has been my"home"
every Tuesday and Friday morning since arriving here last June. Having moved to San
Luis Obispo County as a single person at age 64, I was so pleased to find this course; it
was one of the first places where I began meeting and making new friends in the
welcoming Laguna Lake Ladies Golf League. Not only has Laguna Lake provided me
with a new social framework here,but also it has afforded me the type of exercise that I
can do(and should do)with the health constraints that I have. As you can see, I have so
appreciated the opportunities to live more healthfully because of this golf course.
I appreciate the budgetary limitations you face as a governing body;yet please hear the
stories of our ladies who speak so passionately about the needs in their lives that this
course addresses. Please see all the good this course has,and continues,to bring to our
lives. And we are just one group; so many others also value this community resource.
Thank you so much for your consideration of this point of view.
Most sincerely,
Elaine Henfling RECEIVED
MAY IS 1010
SLO CITY CLERK
May 20, 2010 R E " E I V
Re: Laguna Lakes Golf Course MAY 2 5 2010
Dear Council Members, �SLO CITY CLERK--
Last summer my husband and I traveled 6,745 miles around our western states and
Canada. We played golf on the municipal courses in many places where we stopped for
the night or several days. We were always comparing them with our courses, especially
Laguna Lakes. Most places the prices were comparable. Due to the differences in climate
the greens and fairways were not up to our community course standards.There were
however, some very challenging courses and most were 18 holes. Most of the courses
offered a place for their high schools to practice and learn the game. We were very aware,
after playing a few courses, of the"little jewel" we have in Laguna Lakes. This is like the
diamond in the crown of our community!
We have people parks, bike paths, walking trails, dog parks but only one in-town
community golf course. How lucky we are!
I am well aware of the tough financial times we are facing but it's important to look at
the big picture and the lasting repercussions some decisions can have.
Laguna Lakes serves a diverse group of people both children with their families, college
students and the senior set. We are providing an opportunity for children to exercise
while learning the game of golf and good sportsmanship. The education departments
have cut back recreation programs at the same time stating our children don't get enough
exercise.. Somehow this doesn't make sense to me. So we as a community must offer
every opportunity to keep our families healthy.
In considering golf course maintenance costs compared to park maintenance costs I'm
sure it is more. But not much, since the golf course does have some income.
I hope in considering golf versus park you members of the council will realize what an
asset the Laguna Lakes Golf Course is to the all over image of our lovely community
and what an opportunity it affords so many people to enjoy exercise and the outdoors..
Sincerely,
Mary C. Hough
J
1701 Los Osos Valley Rd.
Los Osos, CA. 93402 L
Ei'COUNCIL C''L`DD DIR
� 64Ttl�lG/LLjFIN DIR
i � aSTCay�tG�C�"FIRE CHIEF
9 C TTCANEY Q"PW DIR .
@@@@ II�J CLERK/ORIG C3_PaLICE CHF
RED.FILE F] DEPT HEADS 2,REC DIR
,�--p_IB
`= MEE'TING AGENDA � . - °�:C3'GTIL DIP ,.
/ /� ITEM#-, tirirrs.
Cd2c'Vet L
t[T11 M6P—
� CI.EP.k.