09-25-1996 Addendum
ADDENDUM
III.
OLD BUSINESS
A. Skateboard Park
Over the last several months, we've discussed briefly the issue of a
skateboard park. Subsequently, I have gathered information from other
municipalities, as well as discussed with our staff various issues related to a
proposed park. Also, I have been in contact with Downtown business owners and
representatives concerning problems created by skateboard use.
I am requesting we make a recommendation on this issue at the
September meeting. I will have information for discussion on possible locations,
potential costs, supervision, and rules and regulations for you to consider in
making a decision on whether or not we proceed with this issue.
I will be asking business owners, as well as skateboard enthusiasts to
attend the meeting.
ADDENDUM
A. GOLF COURSE FEES
1996 Golf Financial Status
In 1996 the Municipal Golf Course experienced a slight increase in rounds played from the
previous year. 42,091 rounds were played compared to 41,852 in 1995. A slight increase
has been seen each year since 1993, a year when weather had an adverse effect on play.
The amount of revenue generated from all sources in 1996 totaled $68:3,667, a 6%
increase over 1995. Expenses on the other hand were $717,817, an increase of 13% over
1995. Of the total expenses approximately $26,000 can be attributed to unanticipated
costs due to weather, repairs, etc. The humid weather experienced in August resulted in
loss of several fairways and had tremendous impact on part-time labor, seed, and
chemicals. In addition, repairs of buildings & equipment were considerably higher than
anticipated, as well as a retirement payout for a maintenance worker.
1997 Budget & Projection
Based on the fact that expenses were more than revenue in 1996 the cash balance
beginning 1997 is approximately $72,000. Several years ago we set a target ~~oal for cash
carryover of $100,000. This reserve is necessary for course operation during the early part
of the year when expenditures are constant and revenues are uncertain. This balance
along with scheduling of purchases ensures operation without violating cash basis laws.
To project revenue & expenditures for 1997 and using 1996 actuals and 1997' budgets we
would anticipate revenues will equal 1996 dollars. This is approximately 2% over approved
1997 revenues. Projecting expenses based on 1996 actual and noting that approximately
$26,900 was unanticipated in 1996, estimated budget expenditures will be approximately
$712,000. This figure includes the additional debt service for cart path construction. This
estimate is based on 0% growth in expenditures which will require close monitoring of all
areas of operation.
Based on cash reserves beginning 1997 and anticipated revenue & expenses in 1997, I
am estimating a cash reserve deficit of $56,000 at the end of 1998.
Options
To restore the reserve to our target amount of $100,000, there are two options to consider:
Cut expenditures or increase revenue. To cut expenditures, I feel there are several areas
we can address but caution should be used to not disrupt service. The Pro Shop
operations have seen considerable growth in expenditures in the last several years but the
revenues produced in this are a valuable profit center. One area that may be monitored
is inventory stock. In the area of personnel, the course relies heavily on part-time seasonal
workers. Part-time maintenance expenses have remained steady in the last several years
except for the work required this past year on fairways due to weather conditions. This
extra cost has been identified in the unanticipated expenses. To arbitrarily cut
maintenance costs will undoubtedly lower expenses to meet revenues, but to what level
do we cut before it has an adverse affect on amount of play, ultimately jeopardizing
revenues.
A more realistic approach is to monitor costs but still provide the level of maintenance that
produces the quality course expected. To ensure the quality is maintained and the amount
of expenditures are available to sufficiently achieve this level, and to maintain the targeted
reserves, it is necessary to increase revenues through a fee increase. To cover the
estimated $56,000 deficit, several areas need to be targeted. It is recommendl3d golf fees,
cart rental, trail fees, storage fees all be adjusted rather than focus on one area over
another.
Proposal
It is recommended that all playing fees be increased $1.00 per round. The increases
would be as follows
Current Proposed
Daily & Weekend Green Fees Weekday $8 $9
Weekend &
Holidays $10 $11
Patron Cards Junior $100 $100 + $1 Surcharge/Per Round
Regular $400 $400 + $1 Surcharge/Per Round
Discount Cards 10-Play $75 $85
26-Play $182 + $2 Weekend $208 + $2 on Weekends &
& Holidays Holidays
52-Play $312 + $2 Weekend & $364 + $2 on Weekends &
Holidays Holidays
Based on the number of rounds played in previous years this increase should generate
approximately $42,000 annually.
It is also recommended cart rental, trail fees, & storage of carts be incrE~ased. The
increase would be as follows:
Cart Storage
Current Proposed
9-Holes $10 $11
18-Holes $17 $18
20-9-Hole Rounds $150 $160
9-Holes $3 $4
18-Holes $4,50 $5,50
Gas $120 $170
Electric $150 $200
Cart Rental
Trail Fees
Additional revenue generated by these increases, based on 1996 figures is approximately
$14,000; total revenue with all proposed increases is $56,000. These modest increases
will still allow golfers to play at a very reasonable rate, and provide numerous discount
choices for individuals to choose from based on personal budgets and time available.
Examples
To further show the options golfers have available to them the following provides several
scenarios. All are based on proposed increases.
The golfer who plays infrequently and chooses not to pay up front any sum of money for
multi play options may purchase daily green fees at $9.00 per round.
One who chooses to play approximately 10 rounds per year can purchase a 1 O-play card
providing a $.50/round discount at $8.50 per round.
The golfer who anticipates playing approximately every other week can purchase a 26-play
card for $208, providing a $1/round discount costing $8.00 per round.
The player who plays approximately once a week may opt for a 52-play card providing a
$2.00/round discount or $7.00 per round.
Those players estimating they will play more than 67 times may consider the patron card.
Playing 67 times costs $7.00 per round.
Playing 80 rounds costs $6.00 per round.
100 rounds played is a per round cost of $5.00.
134 rounds played is a per round cost of $4.00.
150 rounds played is a per round cost of $3.67.
200 rounds played is a per round cost of $3.00.
And over 200 rounds played is a per round cost of less than $3.00.
As you can see, a number of options are available allowing individuals to play for very
reasonable rates and still provide the additional revenue needed for financial stability. It
is staff's recommendation the proposed fee schedule be approved for considE!ration by the
City Commission.