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Council 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 0 0 0 ~<~ o00 oqo~q OO Oo O0 o 0 o 0 0 0 0 o o 0 o