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Home My WebLink About06/01/2004, PH 1 A - LAGUNA LAKE GOLF COURSE FUND RATE REVIEW o Council Mee6ue Dae lune 1,2004 Agcnaa RepoRt ❑e.Nino ^ CITY OF SAN LUIS OBISPO H FROM: Paul LeSage, Director of Parks and Recreation SUBJECT: LAGUNA LAKE GOLF COURSE FUND RATE REVIEW CAO RECOMMENDATION 1. As recommended by the Parks and Recreation Commission, adopt a resolution setting fees for Laguna Lake Golf Course effective July 1, 2004.. 2. Authorize a General Fund operating transfer of$213,500 for 2004-05. DISCUSSION Background The proposed Resolution (Attachment 1) increases all fees by $0.25 per round, except for the Twilight Rate, which has been.recommended to increase by a $1.00 per round for the Laguna Lake Golf Course (LLGC). Even with a strategy of increasing golf revenue by attracting more golfers, a modest fee increase should not decrease rounds played. Rate Review Objectives The objective of the Rate Review is to establish a fee schedule that maximizes revenue and will accomplish the following: • Ensure continued operation of the course. • Create an opportunity for more residents to enjoy golf. • Generate sufficient revenue to cover direct operating expenses. The key element of the 2004-05 rate structure is keeping the same basic rate structure with a modest increase. The rates should not decrease rounds played and course income, nor will they exclude players. They will,however, help to reduce the expenditure/revenue gap. LAGUNA LAKE GOLF COURSE FEES Current rates Current Proposed rates Proposed Ind 9-holes 2nd 9-holes Senior/Youth/Student Weekdays: $6.25 $4.25 $6.50 $4.50 General Weekdays: $8.25 $4.25 $8.50 $4.50 Senior/Youth/Student Weekends: $7.00 $4.25 $7.25 $4.50 General Weekends: $9.00 $4.25 $9.25 $_4:50 Senior/Youth/Student 10-Play Card: $57.50 $60.00 General 10-Play Card: $67.50 $70.00 Twilight Rate: $4.00 $5.00 Council Agenda Report-Laguna Lake Golf Course Fund Rate-keview 2004-05 Page 2 Staff has reviewed the Twilight Rate with regular participants and found them to be receptive to an increase of a$1.00. Status of the new initiatives aimed at increasing revenue In April of 2003, staff presented Council with a plan to increase revenue over time at the course. The two major efforts were to expand the base of regular golfers using the course and to maximize other sources of revenue. Specials such as reduced fees to play a second nine holes, twilight rates, and a family discount have increased rounds. However, the program that has the most potential for impacting rounds is First Tee. Designed for youth golfers, First Tee is a World Golf Foundation program that teaches life skills through participation in golf. The program started last September in San Luis Obispo, with 61 local youth golfers completing the fall/winter session. A second session will begin this summer. If most of these youth golfers remain active, course play will increase over the next few years. Staff has been pursuing several options to maximize course revenue. It appears likely that a cellular provider will locate an antenna on site, bringing in annual revenues of$25,000. Also on the Councils agenda this evening is a request to enter into a Memorandum of Understanding (MOU) with a cellular provider. The MOU states that if the company can successfully complete the City's development review process, an agreement will be negotiated and executed for a cellular site at the golf course. In addition, staff recently acquired two electric golf carts. Besides providing additional revenue, the carts allow disabled or elderly golfers access to the course. Staff has also found a vendor willing to, on a trial run basis, place a food concession at the course. While this is basically a hot dog cart, the vendor will try some Friday barbeques and be available to cater events in the picnic area at the course. CONCURRENCES The Parks and Recreation Commission reviewed and approved this item at it's May 5, 2004 meeting. FISCAL IMPACT The following summarizes proposed operating transfers from the General Fund for 2003-04 and 2004-05 compared with estimates in the mid-year budget review: i - earl emew Proposed. anance 2003-04 $22U,tsool $220,8001 $0 2004-05 218,80U 213,5uU I Council Agenda Report=Laguna Lake Golf Course Fund Rate Review 2004-05 Page 3 These projections do not assume the possible receipt of$25,000 annually in telecommunication lease revenues, since an agreement has not yet been executed. However, if this occurs, then General Fund operating subsidies will be further reduced in the future. In summary, the proposed transfer is less than previously estimated and is consistent with subsidy levels approved by the Council as part of the 2003-05 Financial Plan. ATTACHMENTS 1. Resolution 2. Parks and Recreation Commission draft Minutes of May 5, 2004. 3. Changes in Working Capital G:Finance/Budget Folders/Financial Plan Supplement/2003-05/Enterprise Fund Rate Review/Golf CAR � - 3 Pt ATIAMME11T._L__ RESOLUTION NO. (2004 Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO INCREASING THE FEE STRUCTURE FOR THE LAGUNA LAKE GOLF COURSE AND RESCINDING RESOLUTION NO. 9454 (2003 Series) WHEREAS, it is the policy of the City of San Luis Obispo to review program fees on an ongoing basis; and WHEREAS, those fees are adjusted as required to ensure they remain equitable and adequate to cover the cost of providing services; and WHEREAS, a comprehensive analysis of the Golf Course Fund was performed for fiscal year 2003-04. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of San Luis Obispo as follows: SECTION 1. Resolution No. 9454 (200 Series) is hereby rescinded, effective July 1, 2004. SECTION 2. The following green fees shall be as follows, effective July 1, 2004: LAGUNA LAKE GOLF COURSE FEES Proposed rate 2n 9-holes Senior/Youth/Student Weekdays: $6.50 $4.50 General Weekdays: $8.50 $4.50 Senior/Youth/Student Weekends: $7.25 $4.50 General Weekends: $9.25 $4.50 Senior/Youth/Student 10-Play Card: $60.00 General 10-Play Card: $70.00 Twilight Rate: $5.00 SECTION 3. The fees for the driving range, wholesale goods, lessons, and other special activities and promotions shall be set by the Director of Parks and Recreation and the Golf Course Supervisor. Upon motion of seconded by and on the following roll call vote: GACoauil Agenda ReparrMexhaion-G.C.0 30N.DOC I— 4A AYES: NOES: ABSENT: the foregoing resolution was adopted this 1S`day of June 2004. Mayor Dave Romero ATTEST: Diane Reynolds, City Clerk APPROVED AS TO FORM: &aMIC Lowell, City Attorney G.-Wouncil Agenda ReponARemlution-LLGC 2004.DOC Parks and Recreation Commission ATiADWENT� MINUTES City-County Library Conference Room Wednesday, May 5, 2004 7:00 p.m. CALL TO ORDER: Chair Peter Dunan called the meeting to order at 7:01 p.m. O \O, ROLL CALL: Chair Pete Dunan, Commissioners:, Gary Clay, Don Dollar%, n, John Knight,Jill Lemieux, and Bill Pyper. ABSENT: None STAFF: Director Paul LeSage,Todd Beights, and Cindy McDonald. CONSIDERATION OF MINUTES. The minutes of the April 7, 2004 meeting-were approved as submitted. PUBLIC COMMENT PERIOD: No public comment. 1. Volunteer of the Month Chair Dunan presented Howard Hendlener as the Volunteer of the Month. 2. Mitchell Park Bandstand Donation LeSage presented the staff report regarding the Rotary Club's offer to construct and donate a bandstand in Mitchell Park. LeSage introduced Jim and Gail Hoffman, donor's of the bandstand who described the bandstand construction. Commission discussed the item. Recommendation: Recommend that the City Council accept the Rotary Club of San Luis Obispo's offer to construct and donate a bandstand in Mitchell Park. 3. Laguna Lake Golf Course Rates LeSage presented the staff report for the change in fees for the 2004/2005 fiscal year. Commission discussed the item. Recommended Action: Endorse the change in fees for Laguna Lake Golf Course effective July 1, 2004, increasin:allrates;by) 25 cents per round and$1.00 a round for Twilight Rates. (Knight/Lemieux, unanimous). . umcations Lease LeSage introduced Cindy McDonald, who presented the staff report regarding a telecommunications facility to be located in Laguna Lake Golf Course. Commission discussed the item. 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