HomeMy WebLinkAbout05/27/1997, 5 - GOLF COURSE FUND RATE REVIEW RATE REVIEW OBJECTIVES
The objective of the rate review is to establish a fee schedule that maximizes revenue. The
extension of the existing rates, plus the Senior/Youth weekend rate and 10-play cards, will
accomplish the following:
• Ensure continued operation of the course
• Establish a rate consistent with other facilities in the area
• Create an opportunity for more residents to enjoy golf
• Close the gap between overall expenditures and revenue
The key elements in the 1997-98 rate structure are:
1. Keep course fees at their current level. Green fee revenue has increased each of the past
three years. This can be attributed to an increase in rounds played and modest fee
increases. However, with Dairy Creek Golf Course open, most local courses might
actually reduce fees because of the increased competition. Raising fees at LLGC could
actually reduce revenue.
2. Authorization of a weekend Senior/Youth rate of $5.75. Weekend play is typically less
than weekday at LLGC. This is because the major course user group, seniors, is required
to pay $2.75 more for a weekend round. Setting a $5.75 rate gives seniors and youth the
same $2.00 fee reduction that is available during the week. The fee reduction will spread
rounds now played on the five weekdays over the entire week. This will open up more of
the prime weekday tee times and generate more revenue.
3. Authorize the sale of 10-play cards. 10-play cards allow golfers to play at a reduced fee.
LLGC benefits from the increased play. This program has been tried on a pilot basis to
judge its effectiveness prior to recommending it to Council. The results were most
positive. 399 cards were sold during the 1996 summer period. Green fee revenue
increased over that period by $11,330.
FISCAL IMPACT
The golf course is not generating sufficient revenue to operate as a full Enterprise Fund. To
remain as an Enterprise Fund means it will likely continue to need a General Fund subsidy,
primarily to cover the general government portion of the Fund budget.
ALTERNATIVES
Change the status of the LLGC from Enterprise Fund to a General Fund program within the
operating budget of the Parks and Recreation Department.
As a department program, the golf course would recover all of its direct costs and 80% of the
total City-wide cost of operation. The 80% recovery rate would be higher than any existing
department program.
There would not be a fiscal impact on the General Fund if LLGC's status was changed.
Again, course revenue exceeds operating costs. The General Fund supplement to the Golf
Course Fund is returned to the General Fund to cover general government costs.
Staff, particularly the Golf Course Supervisor and the Parks and Recreation Director, has been
reluctant to recommend this change. LLGC status as an Enterprise Fund creates a sense of
urgency among the staff members. Every expense is carefully considered before being
authorized.
However, there is a realization that the Course does not have the facilities to operate as a true
self-sustaining Enterprise Fund. The major shortage is the lack of a full-size driving range. A
similar course in Ventura County generates over $200,000 in driving range revenue. LLGC
revenue from the "driving range" is $5,000 - $6,000 per year.
The Course revenue is not increasing at a level that covers the general government charges.
Additionally, Course Capital Improvement Projects and equipment replacement have been
deferred for several years. Projects, such as re-paving the parking lot, will need to be
addressed in future financial plans.
SUMMARY:
Maintaining the current fee structure will increase greens revenue. Based upon recent history,
all golf course revenue will continue to increase during the next two-year budget cycle. This
increase will not be sufficient to allow the Course true Enterprise status.
ATTACHMENT
1. Resolution
2. Change in Fund Balance Sheet.
Attachment
RESOLUTION NO. (1997 Series)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SAN LUIS OBISPO (PURPOSE OF RESOLUTION)
WHEREAS, it is the policy of the City of San Luis Obispo to review program fees on an
ongoing basis; and
WHEREAS, those fees are adjusted as required to ensure they remain equitable and
adequate to cover the cost of providing services; and
WHEREAS, a comprehensive analysis of the Golf Course Fund has been performed for
fiscal year 1997-98 and 1998-99.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of San Luis
Obispo as follows:
SECTION 1. Resolution No. 9VA (Series 1995) is hereby rescinded, effective
July 1, 1997.
SECTION 2. The following green fees shall be as follows, effective July 1, 1997:
Senior/Youth Weekdays $5.00
General Weekdays $7.00
Senior/Youth Weekends $5.75
General Weekends $7.75
Senior/Youth 10-Play Card $45.00
General 10-Play Card $55.00
SECTION 3. The fees for the driving range, wholesale goods, lessons, and other special
activities shall be set by the Parks and Recreation Director 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 this day of , 1997.
Mayor Allen Settle
ATTEST:
Bonnie Gawf, City Clerk
APPROVED AS TO FORM:
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ATE�5 z7 q AGENDA
ITEM
May 22,1997
Communication for May 27 Agenda
TO:City Council Members
FROM:Kathy Smith -
RE: Agendizing proposed ordinance
I have been meeting with Dr. Steve Hansen (Jeff Jorgenson present once)
regarding a proposed ordinance I would like the Council to consider ASAP.
The ordinance concept is quite straight forward and serves to make a statement
about our concern for our youth in terms of tobacco addiction.
The major component is that of removing counter-top displays of cigarettes from
all retail establishments —probably not a large number left in SLO. Additionally
its enforcement would be proposed as complaint-based.
In my view, we need this Ordinance in San Luis —it is already in Santa Barbara,
Carpenteria and other cities in California. My request will be to agendize this
issue and instruct staff to draft an ordinance for our consideration.
Your concurrence on this first step will be appreciated.
CC:John Dunn
Jeff Jorgenson
Jim Gardiner
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MEMORANDUM
Date: May 27, 1997
To: John Dunn, City Administrative Officef .S
Ken Hampian, Assistant City Administrative Officer
From: Neil Havlik, Natural Resources Manager, City of San Luis Obispo-A
Subject: Request for State Support for Property Acquisition at 1011 Higuera St.
At the closed session-meeting.of March 18,_the Council authorized staff to explore funding
possibilities for the above property (Thai Classic)from-State funds.-This-was based-upon a --_. -
concept proposal from the agent for the new owners. Pursuant to this direction staff
approached Sen. O'Connell's office regarding use of Proposition 204 funds, and the
general concept outlined. Sen. O'Connell's office reported today that they have been
successful in allocating $350,000 of State funds into the Senate version of the budget for
this project.
This is a great step forward, however, the matter will have to go to conference during the
budget process, and it remains to be seen whether the funds will be in the final version of
the State budget. Assemblyman Bordonaro's office has been supportive as well and from
that standpoint the matter appears hopeful.
Council members will recall that the concept was that the restaurant would be relocated
elsewhere on the property, by enlarging the remaining building, and the then-empty
restaurant would be sold to the City, thus obviating our relocation obligation. The seller
and others have verbally pledged funding support for restoration and beautification
activities following the acquisition. These would be designed to enhance the creek
environment, make it visible from Higuera Street, and allow a walkway between Higuera
and Marsh Streets along the creek.
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