HomeMy Public PortalAboutCouncil Minutes 1993 07/19MCCALL CITY COUNCIL
SPECIAL CALL
MINUTES
July 19, 1993
I. CALL TO ORDER AND ROLL CALL:
Mayor Smith called the special meeting to order at 12:10 p.m.
and announced the purpose of the meeting which was to deal with
the financial condition of the Golf Fund. Councilmen Larson,
Wallace, and LeBrett answered the roll call. The Mayor declared a
quorum present.
II. GOLF FUND FINANCES:
The staff made a recommendation regarding budget adjustments,
a copy of that report is attached to these minutes and made a
part thereof. The Golf Course Advisory Committee members were
present and confirmed that no fee adjustments should be
undertaken during 1993. After discussion, Wallace moved to adopt
the staff report and approving the expenditure reductions of
$20,000. Use of $20,000 from the Capital reserve for sprinkler
system improvements, and directing the Golf Pro to maximize
revenue for the 1992-1993 Fiscal Year. LeBrett seconded and the
motion carried unanimously.
III. ADJOURNMENT:
Wallace moved to adjourn at 1:05 p.m. Larson seconded and the
motion carried.
Clerk /
DRAFT
July 15, 1993
TO: Mayor and Council
FROM: City Administrator
RE: Golf Fund
On this date I met with the golf staff and discussed the budget
difficulties identified.
This discussion focused on the Treasurer's statement distributed
to the Council on July 8.
The following actions are recommended to address the budget
problems:
1. Reduce 0 & M expenditures by $20,000 for the current
fiscal year. This is achievable without any deterioration to
the maintenance of the facility through October 1.
2. Reduce the contribution to the Irrigation system to
$10,000 for the current year, thereby providing an additional
$20,000 to carry the fund forward.
3. Expect other non-season revenue to provide working
capital, for example, the Golf Cart lease has a Dec. 31 payment
date and, if completed and fully rented would provide $1100. The
restaurant operator will continue operations into the winter and
the revenue from that is unknown without other comparison.
4. Direct the Golf Pro to take all necessary actions to
maximize revenue from the course. Note: This will include
scheduling small tournaments on the weekends, limiting
availability for public use.
5. There are a number of other small items that could provide
other income. The Calcutta provides no income to the Golf Fund
(10% is given to the Men's Golf Association, but does not go to
the fund.) A fee for closing the clubhouse to the public for
this evening is not charged. The fee for off season use is $250.
There is no other event during the season during which the public
is fully excluded from the facility. Further, not charging a fee
may suggest that the city is sponsoring this event. That
implication may result in unnecessary liability for the city. A
fee of $500 would seem reasonable.
OTHER SUGGESTIONS: The source of this difficulty is
two-fold. First weather conditions are not providing the long
seasons we have enjoyed over the past seven years. Secondly, the
revenue estimates have been based on these trends.
As with all trends, when it changes, revenue falls as has
occurred here. The solution is to base revenue estimates in the
future on a 10 year average of golf play times the current fees.
(This calculation must, of course, account for the rounds played
by passholders.) Such calculation may mitigate the impacts of
weather on any single year.
The long seasons have had the effect of providing
additional revenue without significant fee increases. The staff
has recommended changes to the fee structure. If the City
wishes to maintain the high quality of maintenance on the course,
accomplish various improvements, and ensure that the fund
maintains financial integrity, significant rate increases should
be adopted for 1993-1994. This matter should be referred to the
Golf Committee for recommendation, which recommendation should be
received by the Council by November 15, 1993. Fee adjustments
for 1993 are not recommended.
PRIVATIZATION: There was a suggestion at the Council
meeting that the Golf Course be sold. That option has been
suggested in the past and, given land costs alone, is unlikely.
However, to have the facility leased to a private operator,
thereby shifting the business risk, has been accomplished here in
the past. This alternative would permanently resolve the current
financial difficulty and would eliminate much of the public
bickering that surrounds the city's operation and precludes many
reasonable business decisions. This can be done to preserve
public access to the course.
The contract with John Drips effectively did that. I have
changed my position on the retention of the maintenance operation
by the city. It is clear to me that a golf contractor cannot, at
the risk of destroying his own business, defer and reduce
maintenance on a golf facility. The current bond on the golf
clubhouse now precludes this arrangement. However, if a
contractor were to pay the bonds off as the first years lease,
this matter could be resolved. I would propose that the city
review this matter during the winter and detail this alternative
for future consideration. While perhaps not an immediate
solution, privatization of the golf operation should be
considered in the next 3-5 years.
The lease income from this contract could be used, first, to fund
a trust fund for acquisition of land for future public golf
courses and secondly, could be used to provide a fund to support
park, recreation and open spaces in this city.
Bud
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