HomeMy WebLinkAboutAgenda Statement 1986/06/10 Item 8 COUNCIL AGENDA STATEMENT
Item 8
Meeting Date 6/10/86
ITEM TITLE: Resolution 4A5)--1--- Establishing greens fees at Chula Vista
Golf Course
SUBMITTED BY: Director of PaMcsj`and Recrea n
REVIEWED BY: City Manager ,j4 4 (4/5ths Vote: Yes No X )
American Golf Corporation has requested a greens fees adjustment for the Chula
Vista Golf Course as provided in the lease agreement with the City of Chula
Vista. The effective date of the increase would be July 1 , 1986.
RECOMMENDATION: That Council approve the greens fees request to be
effective July 1 , 1986.
BOARDS/COMMISSIONS RECOMMENDATION: The Parks and Recreation Commission
reviewed the requested rate adjustment at their regular meeting on May 22,
1986, and voted 4-0 to not consider a greens fees increase at this time but
would reexamine a new proposal containing a resident fee discount in six
months.
DISCUSSION:
American Golf Corporation signed a lease agreement with the City on
October 15, 1984, to operate and manage the Chula Vista Municipal Golf Course
and Driving Range. The Agreement commenced on November 1 , 1984 for a
three-year period. The lessee has an option to extend at the end of the
initial three-year term for one two-year period and three separate five-year
periods if the lessee is otherwise in full compliance with all of its
obligations and responsibilities under the agreements.
The Lease Agreement requires the Lessee to notify the City in writing of its
desire to change fees not less than sixty (60) days prior to the date that the
new fees are to go into effect. The lease agreement states "City shall have
the right to approve the green fees charged by lessee. It is the City's
intention that such green fees may be comparable to those charged by other
comparable public golf courses in San Diego County for similar services." In
addition, greens fees may not be adjusted more than once every lease year.
During their initial takeover, American Golf Corporation made the decision to
retain the existing City fees because, in their opinion, the condition of the
golf course did not merit an increase. Nine months after they began operation
and after significant renovations and upgrading had taken place, American Golf
Corporation submitted a request on July 10, 1985, to increase greens fees
Page 2, Item 8
Meeting Date 6/10/86
effective on September 15, 1985. The letter (attachment 'A' ) requesting this
adjustment, was not processed by staff in a timely manner and consequently,
was not acted upon until late September 1985. The processing time involved in
taking it before the Parks and Recreation Commission on October 17 and the
City Council on October 22, resulted in November 1 , 1985, being the effective
date of implementation. This increase occurred exactly one (1 ) year after
American Golf assumed the operation of the course.
The existing lease agreement states that greens fees can only be adjusted once
every lease year. The increase being requested at this time (Attachment 'B' )
would technically result in two (2) increases during the second lease year.
Staff feels that this adjustment is warranted in light of the fact that
American Golf Corporation did request an increase in the first lease year but,
through no fault of their own, was prevented from implementing this adjustment
until the first day of the second year.
The following is a listing of the existing and proposed greens fees:
Existing Proposed Rate
Weekday
18 holes $ 7.00 $ 8.00
9 holes/twilight 4.50 5.00
Resident Senior with discount card N/A 18 - $4.00
9 - $3.00
Weekend
18 holes $ 9.00 $11 .00
9 holes/twilight 5.00 6.00
Monthly Tickets
Junior $25.00 $25.00
Senior 35.00 N/A
Resident 45.00 N/A
Grandfather 60.00 N/A
The following is a description of the various monthly tickets that are
available and how they will be affected should the new greens fees be adopted:
Junior
The cost of this monthly ticket is currently $25 and no increase is
proposed. This ticket allows a junior (defined as non-college students
who have not reached their 18th birthday or completed their senior year of
high school ) to play a maximum of 18 holes per day after the hour of 2:00
p.m.
Page 3, Item 8
Meeting Date 6/10/86
Senior
The senior citizen monthly ticket is currently $35 and is proposed to be
eliminated. There are presently ninety (90) seniors using the discount
pass. Although exact figures as to the number of rounds being played by
these individuals are not available, American Golf estimates that on the
average, these passes are being used approximately three (3) times per
week. The pass system would be replaced by a senior weekday discount rate
of $4.00 for 18 holes and $3.00 for 9 holes. An age eligibility
requirement must be met and the following restrictions are imposed to
qualify for this discount rate:
1. Chula Vista residency
2. Annual charge of $10 for identification card.
3. Verification of residency by driver's license or voter registration
card will be required.
4. The individual must be at least 62 years of age.
5. Play is restricted to weekdays only, holidays excluded.
6. Only weekday tee-off times are permitted at the reduced senior
citizen rate.
Resident
The cost of a standard monthly ticket is currently $45. The proposed fee
structure eliminates this category. The current monthly ticket allows the
purchaser to play a maximum of 18 holes per day on weekdays. The ticket
is not valid on weekends and legal holidays. At this time, twenty (20)
residents have purchased these monthly tickets.
Grandfather
Under the current fee structure, any non-resident holding a current
monthly resident or non-resident ticket during the period of April 3
through May 5, 1981 , will be allowed to purchase a monthly discount ticket
for a charge of $60 each and may continue to purchase a ticket so long as
the monthly sequence of ticket purchases continues unbroken. This
privilege is not transferable. The proposed fees increase requires the
elimination of this ticket. Elimination of this monthly ticket would
affect ten (10) non-resident users.
The proposed fee increase, in staff's opinion, is fair and in line with what
is being charged at comparable courses throughout the county (attachment
'C' ). The only serious opposition that has been generated has come from the
resident senior citizen golf course users. Under the proposal , resident
seniors would receive an annual identification card for $10.00 and would,
Page 4, Item 8
Meeting Date 6/10/86
unlike the present system, be allowed to make tee time reservations on week
days. In Oceanside, where a similar system existed and was replaced by the
proposed system, the number of resident seniors using the program went from
235 to more than 600 and is now approximately 1 ,000. The major reason for
this dramatic increase was due to the availability of tee times to the
seniors. It is anticipated that the same type of overall increase would occur
if the new fee structure is adopted here. In addition, the large number of
senior golfers that presently pay full cost to play, in order to have a tee
time, would benefit from the reduced rate.
American Golf has made substantial capital improvements on the golf course,
completing many contract requirements ahead of schedule. An estimated
$635,672 has been spent to date with another $228,000 to be spent by the end
of February, 1987, on course improvements. Golf course attendance figures
seem to support the fact that the improvements are attracting more golfers.
In FY 1984-85 the number of rounds played were 88,830, in FY 1985-86 the
number of rounds played increased to 95,175. Comments from the general public
regarding the condition of the course are all positive.
The lease agreement with American Golf Corporation requires them to pay a
minimum annual guarantee plus an additional 15% if the minimum is exceeded.
The following is a breakdown of the dollar amount the City is guaranteed and
what it has received to date:
Minimum Revenue
Year 1 $ 68,000 $85,900
Year 2 74,000 97,500*
Year 3 86,000
Year 4-8 100,000 *Projected revenue for second
Year 9-13 112,000 lease year.
Year 14-20 124,000
During the first year of ,operation, the City received $68,000, plus an
additional $17,490 above the minimum. It is conservatively estimated that if
the new fee increase is implemented that the City would receive $97,500 in
revenue for an increase of $11 ,600 over the previous lease year.
In summary, the Parks and Recreation Department concurs with American Golf
that a greens fees increase is warranted. This position is based on American
Golf' s performance to date in the area of making course improvements as
required by the contract, a fee proposal that gives consideration to senior
residents of Chula Vista and rates that are at or below those offered by
comparable public courses in San Diego County.
FISCAL IMPACT: The lease agreement with American Golf Corporation requires
them to pay the City a minimum annual guarantee or a percentage of the annual
gross receipts derived from the operation of the golf course and driving range
during the term, whichever amount is greater. Therefore, the increase in
green fees will generate approximately $11 ,600 additional revenue for the City.
WPC 0638R
the City Council of
Chula Vista, California
Dated , Zt,t �j/
ArTAcM,n,,Ur A
_))
AMERICAN GOLF CORPORATION
10 July 1985
Bert Geisendorff
General Manager
Chula Vista Golf Course
4475 Bonita Road
Bonita, CA 92002
Mr. Gene Asmus
Assistant City Manager
276 4th Avenue
Chula Vista, CA 92010
Dear Mr. Asmus :
In accordance with the lease agreement, we are notifying the
City of Chula Vista that we intend to change the green fees
on September 15, 1985. The new green fee rates are as follows:
Monthly Tickets-
Junior $25. 00
Senior 35. 00
Resident 45. 00
Non-Resident Eliminated
Grandfather 60. 00
Green Fees- 18 Holes 9 Holes/Twilight
Weekday $7. 00 $4.50
Weekend/Holiday 9. 00 5.00
On behalf of American Golf Corporation, we would like to take
this time to extend our appreciation for the support and cooper-
ation that the City of Chula Vista has given us in the first
nine months of operation.
Since ely,
/' re/
Bert Ge endorff
f}j rAc tt ihEnsT t3
p
Mr. Manuel A. Mollinedo, Director
Parks and Recreaction Department
276 Fourth Avenue
Chula Vista, CA 92010
Dear Mr. Mollinedo,
American Golf Corporation began operation of the Chula Vista
Golf Course in November 1984. In the first fiscal year
(ending Feb. 28 , 85 ) $255 ,000 was spent on the following
capital improvements:
Irrigation repair
Refurbish course restrooms Landscaping
Refurbish 28 new
Cleaned out lake on #3 golf carts
Renovated pro shop
In the fiscal year ending February 28 , 1986 $380 , 672 was
spent on :
Cleaned out 2/3 of drainage channel
Renovated six tees
Renovated 1/3 of the irrigation
Replaced four bridges ( #s 3 ,9 , 10 , 11 )
6 ,800 lineal feet of cart path
Cleaned out lateral drain
Expanded culvert size
Tee for driving range
Fencing
In this fiscal year ending February 28 , 1987 $ 228 ,000 is
proposed to be spent on:
Cleaning out remaining 1/3 of drainage channel
Renovating tee #s 3 , 14 and 15
Sodding six greens in hybrid Bermuda or bent
2 , 200 lineal feet of cart path
Leveling the driving range (possibly adding lights)
Ten new golf carts
Accordingly American Golf Corporation respectfully submits
the following proposal to become effective July 1,1986, after
approval of the Commission and the City Council.
1
18 holes 9 holes twilight
Weekday $8 . 00 $5 . 00
$5 . 00
Weekend/Holiday $11 . 00 $6 . 00
$6 . 00
Resident Senior Ticket $4 . 00 $3 . 00 $3 . 00
Currently resident seniors , over 62 years of age , can play
Monday thru Friday for $35.00 per month. They are not
allowed to make tee time reservations. In theory this would
mean that a resident senior could play 20 times a month at a
cost of 1 .75 per round. To accomplish this however, the
senior must wait anywhere from 20 minutes to an hour each
day, to get a starting time. Some creative citizens have
joined foursomes with non-seniors, that can reserve times, to
avoid the wait. American Golf Corporation has been indulgent
of this practice , yet it is truly unfair to the Non-senior
and the senior who waits his turn. Other seniors have sought
to short-circuit the system by making phantom reservations
and then show up when the reserving group fails to show.
The maintenance costs alone per golf round are $4.16.
Resident Seniors must renew their tickets monthly which is
cumbersome and time consuming. Under the proposal resident
seniors would receive an annual identification card for
$10.00 , making a yearly renewal much more efficient.
Under the proposal resident seniors could make tee time
reservations .
In Oceanside , where a similar system was replaced by the
proposed system the resident seniors using the program went
from 235 to more than 600 , which indicates that more
constituents are more effectively served by the proposed
system.
For these reasons American Golf respectfully requests your
support.
("2"L
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