HomeMy WebLinkAboutPackets - Council Packets (1195)Council Meeting
Regular Session
October 2, 2019
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Town Council Meeting Announcements
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Upcoming Meetings
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September 4, 2019 Town Council Action Feasibility Analysis
October 2, 2019
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Membership model that welcomes outside play; Day play tee times for all 36 holes; $175K revenue; measurable targets/penalties
Membership course open to day play following overseeding (late Oct/early Nov)
Projected $100K revenue this fiscal year
Expected $175K in FY21/22
If expanded memberships shrink available tee times, revenue target will still be met/exceeded
Performance standards will be developed in competitive RFP procurement process
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$750,000 Tax subsidy/threshold or better; apply sales taxes to subsidy calculation
Estimated $85K in sales taxes attributable to 36-hole golf operation (retail and utility)
Membership course change for day play increases revenue $175K over 3 years
Without HOA contribution, achieve $750K or better by FY21/22. Possibly sooner if revenue collections remain strong
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Membership rates raised 10% by 1/1/20 to reflect projected revenue in 36 hole pro forma
5% increase in membership dues effective 1/1/20
Membership revenue for current FY projected to be $70K more than last FY
Strong membership renewal, with 240 members as of today (last FY was 242)
Projected to meet estimated revenue in pro forma
New operator will monitor/adjust to achieve revenue targets
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Needed capital improvements pay-as-you-go; Conquistador course first; Community center fund source; possible General Fund use competing with other priorities.
Community Center fund healthy and projections expect $1.6M fund balance by 6/30/21
Fund has capacity to fund all capital investments for 36 holes and the community center renovation. Timing is the issue.
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Close Overlook; alternative vendor operate coffee/sandwich shop on ground level
Relocation/shrinking restaurant supported and previously recommended
Small downstairs facility not currently capable of supporting 36 holes. No bar, no seating, inadequate kitchen.
Food/beverage (including alcoholic beverages) necessary for successful golf operation
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Reduce Troon operating expenses 5% starting 1/1/20
Contract provisions dictate process
New RFP will give Town flexibility to develop contract consistent with policy direction and municipal best practices
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HOA financial offers concerns: precedent; target toward youth/other incentive programs; other options to improve long-term viability.
Cañada Hills HOA offer: $100K per year up to 10 years (terms TBD)
Villages of La Cañada: $25K per year up to 10 years (terms TBD)
Offer contingent upon 36 holes only; revenue use up to Town for course operations
Adjacent property contribution not unprecedented, particularly private courses
Agreement with HOAs possible in theory
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Performance metrics; viable plan to convert to 18 holes if not met.
Competitive RFP will include appropriate performance metrics
Plan to convert can be accomplished in estimated 9 months
Caution recommended establishing inflexible pre-set criteria to trigger decision. Continued uncertainty will likely hinder opportunity for 36 holes to succeed.
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Preserve open space with revised zoning
Staff prepared to proceed with rezoning of golf courses at Council direction
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Potential Action Plan to Continue 36 Holes
Establish 80% cost recovery policy
Continued memberships, and full day play access to both courses
Competitive process for new operator. Work with vendor on strategy to maximize revenues and monitor expenses.
Focus on Community Center improvements first. All debt service/repayment from Community Center fund. Relocate F/B downstairs w/ new operator.
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Potential Action Plan to Continue 36 Holes (cont.)
Conquistador irrigation/course refurbishment summer 2021 from Community Center fund balance
Keep Community Center fund to continue to monitor operations
Rezoning at Town Council direction
Variation: HOA contribution for five years ($125K/year)
Achieve $750K target 1 year earlier
Cushion for capital investments
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Variation A – No HOA Contribution
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Variation A – No HOA Contribution
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Variation A – No HOA Contribution
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Variation B – HOA Contribution
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Variation B – HOA Contribution
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Variation B – HOA Contribution
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Financial Summary
Without HOA contribution
Target of $750K (81.4% cost recovery) achieved by year three (FY 2022-23)
Total projected 10-year subsidy $6.26M or average of $626,000 per year
With HOA contribution
Target of $750K (81.7% cost recovery) achieved by year two (FY 2021-22)
Total projected 10-year subsidy $5.64M or average of $564,000 per year
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