body,date,page,text,path
GolfCommission,2008-06-18,1,"ALAMEDA GOLF COMMISSION
MINUTES OF REGULAR MEETING
Wednesday, June 18, 2008
1.
CALL TO ORDER
Chair Jane Sullwold called the regular meeting to order at 6:31 p.m. Chuck Corica
Golf Complex, Ladies Lounge 1 Clubhouse Memorial Road, Alameda, CA 94502.
1-A. Roll Call
Roll call was taken and members present were: Secretary Bill Delaney,
Commissioner Betsy Gammell, Vice Chair Ray Gaul, and Chair Jane Sullwold.
Absent: Commissioner Bill Schmitz and Commissioner Jeff Wood. Also present
were Interim General Manager Dale Lillard and Assistant Golf Professional Mike
Robason.
1-B
Approval of Minutes - Regular Meeting of May 21, 2008, and Special Meeting of
June 4, 2008:
The Commission approved the minutes unanimously.
1-C
Adoption of Agenda
The Commission adopted the agenda unanimously.
2.
ORAL COMMUNICATIONS
None.
3.
COMMISSION COMMUNICATIONS
Chair Sullwold reported that she had a lunch meeting with City Council member
Marie Gilmore last Wednesday to discuss the Golf Complex and the financial
problems. Chair Sullwold summarized the meeting by saying that she doesn't
think that she changed Councilmember Gilmore's mind, although she was able to
voice concerns of the Golf Commission. When questions about the Beltline
expense charged to the Golf Complex, Councilmember Gilmore stated that the
Chuck Corica Golf Complex is in a risk management pool with AP&T and one
other City department (possibly Sewer). ""Risk management"" expenses are shared
on a pro rata basis among those in the pool, regardless of where the risk has been
incurred.
Councilmember Gilmore expressed the view that Council is disappointed with the
Golf Commission for failing to recognize the inevitability of going out to bid for a
long-term outside contractor. Chair Sullwold pointed out that the Commission last
fall had reluctantly accepted the need for a contractor if the City was unable to pay
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GolfCommission,2008-06-18,2,"for capital improvements. In her speech to Council in December 2008, Chair
Sullwold, on behalf of the Golf Commission, recommended that the City pursue
simultaneously an RFP and a program of costing the Commission's list of
possibilities for revenue generation. Councilmember Gilmore said neither she nor
anyone else on Council heard that.
Councilmember Gilmore told Commissioner Sullwold that Council was prepared to
rescind the Return on Investment and Surcharge, which amounts to approximately
$270,000. The City is desperate for money, which explains why Council continues
to characterize the act of rescinding charges as ""subsidizing the Golf Complex
from the general fund."" Councilmember Gilmore stated that Council expects the
Golf Commission to ""sell"" the expected decision to lease out the Golf Complex.
Chair Sullwold also reported that on May 27, City Council conducted a budget
workshop where Golf Complex finances were discussed. No one from the Golf
Commission was present because Interim General Manager Dale Lillard did not
tell anyone about the meeting. At the workshop, Council asked many questions of
and assigned tasks to the Golf Commission. After Mr. Lillard refused to give
notice, the Golf Commission held a special meeting on June 4, 2008, to prepare a
letter to the Mayor and City Council that was hand-delivered on June 5, 2008. In
the course of e-mail communications, Mr. Lillard advised that ""it is our position that
the Finance Dept. and Auditor have provided more than adequate responses to
the [financial] questions raised and there is no need to provide any further
response.'
On Monday, June 9, Council conducted another workshop at which Golf Complex
finances were discussed. Again, Mr. Lillard did not inform any Commissioner
about the meeting, asserting that it was a matter of public record and we should
have figured it out ourselves, and, again, Council directed many questions and
assigned tasks to the Golf Commission. Upon watching the video of the meeting,
Chair Sullwold e-mailed Mr. Lillard, asking for the detailed budget worksheets that
itemized the Golf Complex budget proposal submitted to Council, and asked that
two specific agenda items be added to the Golf Commission agenda for its regular
meeting on June 18, 2008. The next day Chair Sullwold learned that Mr. Lillard
was refusing to provide any additional information regarding the proposed budget,
and had refused to include the two specific agenda items on the posted agenda for
the Golf Commission meeting. Chair Sullwold made the motion that staff gives the
Golf Commission 24-hour notice of any City Council meeting that may discuss the
Chuck Corica Golf Complex, Secretary Delaney seconded the motion, and the
Golf
Commission
passed
the
motion
unanimously.
4.
AGENDA ITEMS:
4-A
Response to City Council's Request for Options Regarding Future Operations at
the Golf Complex.
The Interim General Manager reported that he is working on some options
involving course closures as a means to reduce expenses, but does not yet have
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GolfCommission,2008-06-18,3,"anything ready to present. He said that he will have some detailed estimates
available no later than Wednesday, June 25, 2008, and will provide them to the
Golf Commission at that time.
Chair Sullwold passed out spreadsheets and summaries that showed the
economic impact of a variety of different ways that rate increases could be
implemented at the Golf Complex to increase revenues. She made the following
presentation in support of these proposals:
This is the start of a new two-year budget cycle for the City of Alameda. Interim
General Manager Dale Lillard presented a proposed budget to City Council for the
Golf Complex for the next two fiscal years that projects a substantial deficit
between revenues that remain after City take-aways and expenses. The expected
deficit will exceed $700,000 per year, because the City Council refused to rescind
the ROI and Surcharge, as was recommended in the budget proposal.
Although the Golf Complex does in fact make enough revenue to cover its
expenses; it does not make enough to pay them after first paying the City of
Alameda as follows:
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08*
Surcharge
265,869
240,130
230,084
203,683
156,825
156,925
151,527
127,350
PILOT/ROI
188,696
202,842
187,719
185,576
401,138
407,156
323,922
269,487
Cost Alloc.
365,834
381,092
384,395
410,886
400,915
412,942
446,216
530,523
TOTALS
820,399
824,064
802,198
800,145
958,878
976,923
921,665
927,360
*Through May 31, 2008; expenses for June 2008 still need to be added.
National Golf Foundation recommended at the end of last year that the City enter
into a long-term lease with an outside golf vendor to operate the Golf Complex,
stating that this was the only viable alternative to deal with the dire financial
situation. A lease would be attractive to an outside golf management company
because employees who currently work at the Golf Complex would be replaced
with non-union, non-civil service employees at greatly reduced salaries. Alameda
City Manager Debbie Kurita endorsed NGF's suggestion, recommending in
December 2007 that City Council go forward with a Request for Proposals to any
interested contractors. Although that process was delayed by City Council's
decision to engage National Golf Foundation to create a master plan for the Golf
Complex, which will be ready on July 1, 2008, it is expected that City Council will
very soon thereafter authorize the start of the RFP process.
It has been estimated that it could take as long as one year from the date of
Council's authorization to reach a binding contract with an outside vendor. In the
meantime, if Mr. Lillard's projections are accurate, the City will continue to draw an
estimated $700,000 out of the Golf Complex revenue, leaving a deficit between
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GolfCommission,2008-06-18,4,"the remaining revenue and anticipated expenses. This will require further
incursions upon the Enterprise Fund, which stands at about $1.1 million at the
present time. City Council has asked City Staff and the Golf Commission to come
up with proposals to fill the gap.
Chair Sullwold believes that closure of the Jack Clark South course is shortsighted
and ill advised because it would make the Golf Complex a much-less attractive
proposition for an outside vendor, which would have to budget for the expense of
bringing the course back, thus reducing the amount it would be willing to spend for
capital improvements and lease payments to the City. In addition, although the
Fry course does not receive as much play as it did ten years ago, it alone could
not handle as much play as the two courses together generate at the present time.
Accordingly, revenue would be substantially reduced.
Although Mr. Lillard has refused to provide the Golf Commission with the detailed
budget worksheets that would allow in-depth analysis of projected expenses, Chair
Sullwold believes staff has done their best to cut those expenses wherever
possible. There is no more fat to cut out.
If expenses can be cut no further, one must consider ways to increase revenue.
Over the past six months the Golf Commission has initiated and/or supported the
following measures at the Golf Complex with that goal in mind: (1) reinstituted
a
junior golf clinic on Saturday mornings that is currently bringing about 120 children
and their parents to the Complex each week, resulting in increased play on the Mif
Albright course, expenditures in the restaurant, and creation of a future customer
base; (2) made adjustments to tournament policies in an effort to bring more
tournaments to the Golf Complex; (3) requested reconfiguration of the Mif Albright
course back to its original plan, and instituted lowered rates that have brought play
levels up substantially on that course; (4) urged more vigorous and effective use of
website marketing to promote special rates; (5) urged additional ""demo days"" by
golf equipment manufacturers that have increased sales in the golf shop;
(6) ended much of the complimentary golf rounds at the Complex; (7)
recommended several fee adjustments, including raising the rates on the Jack
Clark course to be consistent with those charge on the Earl Fry course and
instituting a reduced super twilight rate to encourage play in the final hours of the
day when the courses are otherwise nearly empty; (8) recommended that the Golf
Complex engage a company that has offered to provide handsome scorecards for
the Fry and Clark courses in exchange for the right to include some modest and
tasteful advertising in the scorecard booklets; and (8) established a marketing
subcommittee composed of Golf Commissioners, friends of the Golf Complex, and
a marketing executive who is volunteering his time to come up with further
marketing ideas. Unfortunately, however, none of these efforts is likely to
generate anything like the amount of money that is necessary to fill the budgetary
gap. The only thing left to do is to increase fees at the Golf Complex.
Chair Sullwold first considered a plan whereby all fees at the Golf Complex would
be raised by the same percentage. Assistant Golf Professional Mike Robason
pointed out that increasing fees for non-resident golfers is likely to backfire
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GolfCommission,2008-06-18,5,"because those golfers already have to drive some distance to play at Alameda. If
their fees were raised to rates that are equal to or greater than other courses that
require similar amounts of driving, many players would likely choose to play at
those courses, which are newer (Metropolitan, Monarch Bay, Callippe) or cheaper
(Lake Chabot, Willow Park) than Alameda. In economics, the term for this is price
elasticity: raise the price, and demand goes down correspondingly.
Residents of Alameda are far less likely to desert the Golf Complex if rates go up,
particularly in these times of expensive prices at the gas pumps. Someone who
can get to the golf course in five or ten minutes is unlikely to decide to drive half an
hour or 45 minutes to reach another course that charges similar or even lower
rates because any differential would be eaten up by mileage costs. Moreover, the
residents of Alameda would be far more damaged than non-residents if a revenue
deficit ultimately caused the closure of part or all of the golf courses in Alameda.
The presence of three attractive, well-maintained public golf courses within a short
drive of anyone who lives in the City positively affects all Alameda residential
property values. Finally, Alameda residents have for years played golf for
substantially less than non-residents. In this time of fiscal crisis for the City of
Alameda and the Chuck Corica Golf Complex, it is fair to ask Alameda's residents
to help.
Chair Sullwold therefore proposes to eliminate all residential rates for golfers at the
Chuck Corica Golf Complex. Assuming no decline in the number of rounds played
as a result of these increases, the plan would generate more than $430,000 in
additional revenue, very close to the amount of the projected deficit. Chair
Sullwold acknowledged that this is very harsh, and very much contrary to the
policy and practices at the Golf Complex during most if not all of the 81 years of its
existence. It is, however, clear from watching the City Council budget workshops
and listening to what Councilwoman Marie Gilmore had to say off the record that
the City Council is unable and therefore unwilling rescind any of the fees it
imposes on the Golf Complex. In order to avoid closure of our courses, the Golf
Commission needs to ask Alameda residents to pitch in to support their Golf
Complex.
The motion was made and passed to have a Special Meeting on June 30, 2008 at
5:30 pm in the Ladies Lounge at the Golf Complex to consider recommendations,
including a proposal for a fee increase, to make to City Council at its meeting of
July 1, 2008.
5.
ORAL REPORTS
5-A
Golf Shop and Driving Range activities report by Assistant Golf
Professional Mike Robason.
The Assistant Golf Professional reported that the Ladies Day on June 11, 2008
was very successful and he is going to try and schedule an event once a month.
The Golf Complex's largest ""Demo Day"" will be held on July 19, 2008 from 10 am
to 4 pm. He will be setting up junior Clinics on Thursday afternoons from 3 p.m. to
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GolfCommission,2008-06-18,6,"5 p.m. for juniors 7-17 years of age. The Pro Shop has begun receiving the junior
golfer subsidies from the Northern California Golf Association.
5-B
Golf Complex Maintenance activities report by Superintendent Doug
Poole.
Vice Chair Gaul stated that the Earl Fry Golf Course is in excellent shape. Chair
Sullwold added that the Jack Clark Golf Course is also in good shape.
5-C
Beautification Program and Junior Golf Club by Mrs. Norma Arnerich.
Mrs. Arnerich reported that there are quite a few new trees out on the golf courses.
The East Bay Junior Golf Championship was well attended with 140 golfers and
was very successful. Mrs. Arnerich thanked Mike Robason for all of his help with
running the event.
5-D
Golf Complex Restaurant Report, Jim's on the Course.
No report given.
6.
COMMISSIONERS' REPORTS
6-A Marketing and Promotions, Commissioner Gammell.
Commissioner Gammell reported that the Father's Day promotion went well. The
Pro Shop will be having a 4th of July sale with all items red, white and blue on sale.
Also during the month of July all women's apparel and shoes will be 20% off.
6-B
Golf Complex Financial Report, Secretary Delaney.
Previously discussed.
6-C
New Clubhouse Project, Vice Chair Gaul and Commissioner Schmitz.
Vice Chair Gaul stated that the project is on hold pending the outcome of the
Master Plan.
6-D
Maintenance, Buildings, Security, Albright Course and Driving Range, Commissioner
Wood.
No report given.
7.
ORAL COMMUNICATIONS, NON-AGENDA (Public Comment)
None.
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GolfCommission,2008-06-18,7,"8.
OLD BUSINESS
Don Roberts stated that he has attended hundreds of board and commission
meeting over the years and the Golf Commission is one of the finest he has seen.
Connie Wendling stated that she thinks that it is a shame that the City of Alameda
and the Council do not realize what an asset the Golf Complex is to the City
9.
WRITTEN COMMUNICATIONS
Included in the Commission packet was a memorandum to the Finance
Department showing the surcharge payment for May 2008 was $15,119. The
year-to-date total to the General Fund is $127,350 for fiscal year 2007/2008.
10.
ITEMS FOR NEXT MEETING'S AGENDA
See above.
11. ANNOUNCEMENTS/ADJOURNMENT
The Meeting was adjourned at 8:43 PM.
The agenda for the meeting was posted 72 hours in advance in accordance with the Brown Act.
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