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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.