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Home My WebLink About2006/07/25 Item 8 COUNCIL AGENDA STATEMENT . ItemL Meeting Date 07/25/06 ITEM TITLE: Public Hearing: Consideration .of Amending the City's Master Fee Schedule and establishing new Greens Fees at Chula Vista Municipal Golf Course Resolution Amending the City's Master Fee Schedule and Establishing New Greens Fees at Chula Vista Municipal Golf Course SUBMITTED BY: Director of pU7 orks operation~ ----- City Manager II (4/5 Vote: Yes_ No.lL) REVIEWED BY: American Golf Corporation (AGC) is requesting rate changes -to green fees for the Chula Vista Municipal Golf Course. In accordance with the lease agreement, AGC can submit rate changes on an annual basis for the City's review and approval. The current Green Fees were requested in January of2004 and have been in effect since December 1, 2004. RECOMMENDATION: That Council. 1) Conduct the Public Hearing for Consideration of Amending the City's Master Fee Schedule and Establishing New Greens Fees at Chula Vista Municipal Golf Course 2) Adopt the Resolution Amending the City's Master Fee Schedule and establishing new Greens Fees for the Chula Vista 'Municipal Golf Course, effective August I, 2006. BOARD/COMMISSION RECOMMENDATION: At the June 22,2006, Parks and Recreation Commission Meeting, the Commission endorsed (6-0) approval of the new Greens Fees. The Presidents of the Men's and Women's Golf Clubs were notified and the proposed rate fee changes were posted at the Pro Shop. Both the Men's and Women's Clubs support the new Greens Fees. DISCUSSION: American Golf Corporation (AGC) submitted a request for rate changes to green fees for the Chula Vista Municipal Golf Course 9n February 15,2006 Staff recommends approving modified Green Fees rates, but different from AGe's proposal. The current green fees have been in effect since December I, 2004 In pr~paring its analysis, staff compared the rate changes requested by AGC to comparable courses in the area, such as Coronado, Bonita, Balboa, and Oceanside. The San Diego Country Club and Eastlake golf courses were excluded from this analysis because these golf courses 8-1 Page 2, Item ~ Meeting Date 07/25/06 are privately and semi-privately owned, respectively AGC did not object to staff comparing their proposed rate increase to the golf courses mentioned above. Golf Course. The current golf course conditions reflect an improved on-going maintenance schedule that delineates' the tee boxes, fairways, and greens areas by mowing grass at a shorter height. Greens quality remains consistent and bunker quality continues to improve. Golf course management has emphasized regular course audits and has paid close attention to details from a golfer's perspective. Furthermore,:AGC has spent $315,000 over the past year making capital improvements to the golf course. Some of the new improvements include: o Completing four (4) tee box renovations; . Renovating the driving range tee; . Planting 40,000 square feet of sod and seed; .. Installing a new bridge to # 14 crossing; .. Renovating bunkers #6, #7, #8, and #13, and .. Resurfacing the parking lot. . " : Green Fees Analvsis. Table A shows CVMGC's current rates, along with AGe's proposal and rates for Bonita, Balboa, Oceanside and Coronado. As indicated in Table A, AGe proposes to reduce resident and.non- resident greens fees below the average greens fees for the four comparable courses for weekdays, excluding resi~ent 9 holes. Regard,ing weekends, AGC proposes to increase resident 9 holes and resident twilight by $l.qO and $0.50 respectively, anq. reduce non-resident 9 hoies ($0.50) and non- resident twilight ($1.00). AGC also proposes to increase the resident card from $8.00 to $10 00 Staff recommends setting non-resident rates at 25% above the resident rates for 18 holes on , ' weekdays. The higher non-resident fees conforms to policy established in the Master Fee Schedule directing the Recreation Department to charge non-residents 25% higher fees for recreational classes. Also, as reflected in Table A, non-residents typically pay higher greens fee at municipal golf courses. However, for 9-holes, twilight and'super-twilight for weekdays and weekends, staff recommends that these fees be set comparable to the average fees for Bonita, Balboa, Oceanside, and Coronado. . Staff . also recommends increasing the resident card from $8.00 to $iO 00 Senior Tickets. AGC proposed to eliminate the senior tickets, thereby, eliminating the monthly $50 card, which allows seniors unlimited play on weekdays for only $2 per round. However, staff recommends keeping the senior tickets and "grand-fathering" existing card holders, which means they could still purchase the monthly card to take advantage ofthe lower rates. However, no "new" additional card sales would be authorized. In addition, st~f recommends increasing the ticket fee from $2.00 to ~~ 00 per round, which allows seniors unlimited play on weekdays. Staffs recommendation is based on the following information. . 8-2 " yo Page 3, Item l- Meeting Date 07/25706 . There are 64 monthly cardholders. . Monthly cardholders represent 29 percent of all weekday play · The monthly cardholders play golf an average of 12 times per month or 3 times per week. . Monthly cardholders pay an average cost of$6.15 per round on weekdays. · By increasing the ticket fee from $2.00 to $3.00 per round, the average cost for the monthly cardholders would increase from $6.15 to $7 16 per round. . Most seniors (a total of 458 or 88%) currently utilize the yearly $10 card. o The $10 cards allow seniors unlimited play at a fee of $10 per round on weekdays; and represents 39 percent of all weekday play AGC also proposes to reduce the cart fee for seniors from $13 .00 to $11 00 Staff agrees with AGC's proposal regarding senior cart fees. Table A below shows CVMGC's current rates, including AGC's and staff s proposals and the rates for Bonita, Balboa, Oceanside and Coronado. 8-3 Q Page 4, Item ~ Meeting Date 07/25/06 Table A - Competitive Market Analysis Average Rates Bonita Balboa Oceanside Coronado Rate of 4 CVMGC Courses Existing Weekday Resident 18 holes 26.00 23.00 21.50 25.00 23.88 21.50 Non-Resident 18 holes 26.00 36.00 25.00 25.00 28.00 27.00 Resident 9 holes N/A N/A N/A N/A N/A 11.50 Non-Resident 9 holes N/A N/A N/A N/A N/A 14.00 Resident Twilight 16.00 12.50 12.00 13.00 13.38 13.50 Non-Resident Twilight 16.00 20.50 14.25 13.00 15.94 17.00 Resident Super-Twilight N/A N/A N/A N/A N/A 10 00 NoncResident Super- Twilight N/A N/A N/A N/A N/A 10 00 Senior (Residents) N/A 10.50 11.00 N/A 1075 10.00 Senior Ticket (Residents) N/A N/A N/A N/A N/A 5000 Ticket Fee N/A N/A N/A N/A N/A 2.00 Weekend Resident 18 holes 38.00 25.00 24.00 25.00 28.00 26.00 Non-ResidenU8 holes 38.00 41.00 33.50 25.00 34.38 3400 Resident 9 holes N/A N/A N/A N/A N/A 14.00 Non-Resident 9 holes N/A N/A N/A N/A N/A 17.50 Resident Twilight 2400 12.50 14.25 13.00 15.94 16.50 Non-Resident Twilight 24.00 20.50 16.75 13.00 18.56 20.50 Resident Super-Twilight N/A N/A N/A N/A N/A 1500 Non-Resident Super- Twilight N/A N/A N/A N/A N/A IS 00 Senior N/A N/A N/A N/A N/A N/A I AGe proposes to eliminate the senior tickets, thereby, eliminating the monthly $50'card, which allows seniors unlimited play on weekdays for only $2 (ticket fee) per round. 2 Staff recommends keeping the sehior tickets and "grand-fathering" existing cardholders. However, no "new" additional card sales would be authorized. Staff proposes to increase the ticket fee from $2 to $3 per round. 8-4 r , Page 5, Item ~ Meeting Date 07/25706 The following information is provided regarding the play at CVMGC based on 73,596 rounds: o Residents represent 63 percent of total play; o Non-residents represent 17 percent of total play; o Approximately 20 percent of total play are tournaments/replays and green fee specials; o The.senior rate of $10 remains.the lowest when-compared with Balboa, Mission Trails, Coronado, Oceanside, and Bonita golf courses. Decision Maker Conflicts. Staff has reviewed the property holdings of the City Council and has found a conflict, in that Councilmember McCarm has holdings within 500' of the property, which is the subject of this action. FISCAL IMPACT: Staff recommends approving modified Green Fees rates, but different from AGC's propo'sal to go into effect on August I, 2006. The new greens fee increase will produce an estimated $18,241 in additional revenue for the General Fund based on a projected 81,603 rounds of golf played at CVMGC. .' Attachment: Request from American Golf Corporation for rate change for Chula Vista Golf Course C:\Documents and S~ttings\robertb\My Documents\Bob\A.113 CVMGC Fee Increase #2.doc 8-5 :;]'(tls ~.~.. ". \; -, ~ '__n_. --' JL -- - ~ -"i,l t.", David Byers Director of Public Works Operations City of Chula Vista 1800 Maxwell Road Chula Vista, Ca 91911 February 15,2006 Subject: Proposed Rate Change for Chnla Vista Golf Course Dear Mr. Byers: The purpose of this letter is to propose greens fee rate changes for Chula Vista Golf Course. The objective is to reduce many of our greens fee rates to stimulate financial growth in this highly competitive market. At the time, we believed that the rate increase in 2004 was needed, but in hipdsight, several of the rate changes were a bit aggressive. . The market has also changed since our last rate change; many of the higher-end golf courses are now discounting more aggressively to capture market share creating a downward pressure on municipal golf course rates. We believe that in order to grow our business and compete for local golfers that we need to re-structure our rates while keeping the folIowing objectives in mind. o Create a rate structure that is always a value so we do not need to rely on heavy discounting and promotions to drive golfers to the course . Lower our weekday green fees to recapture lost rounds during the week o Currently less than 14 residents per day and 4 non-residents are paying our top green fee rate during the week (everyone else is paying a senior rate or a promotional rate) . Develop less complicated rates with round numbers and consistent discounts off the non- resident'rates to promote clarity for our golfers and co-workers . Maintain fair regular rates to compete with Bonita GC which is our main competitor In 2005, our rounds decreased 14 7% and our average green fee increased 15 8%, causing our green fee revenue line to remain flat. We hope by slightly lowering some of the rates we can increase rounds, and thereby, improve revenue for AGC and rent for the City Chula Vista is one of the best values in the San Diego for residents of Chula Vista and we want to make it even better Please see attached worksheet for proposed rate changes. 8-6 The other rate structure we would like to change is the Senior Card pricing. We currently have two different programs. 1 Monthlv' This package is $50 a month and $2 for every round played. We currently have 64 montWy senior card-holders. They play an average of 12 rounds per month, which translates to a $6 average green fee. 2. Annual: This package is $10 per year for the membership and $10 for every time they play We currently have 45S annual senior card-holders. Essentially, we would like to offer the annual card and eliminate the monthly card. We believe that the monthly card $2 green fee rate is excessively low The annual card is a great deal, the seniors prefer it, and it is still best deal in the San Diego marketnno other IS-hole golf courses charge less than $11 per, round. We also are proposing lowering the senior age from 62 years to 60 years, as well as, implementing a senior cart rate of $11 - $2 lower than what they are currently paying. In considering the fact that we have only 64 seniors purchasing the montWy card, the number of seniors affected will be minimal. We feel that the current golf course conditions are at its best ever, thanks to both the efforts of the City of Chula Vista and American Golf. Over the last 12 months we have completed capital improvement projects totaling over $315,000 Some of those recent improvements are: . Rebuilt 4 tees . Rebuilt the driving 'range tee - . Installed 40,000 square feet of sod . Completed pump station building . Added domestic water source availability to supply lake . Added irrigation to #1, #3 and #5 . . Maj or storm drainage improvements on # 10 and # 11 . Built a bridge on #14 _ . Renovated bunkers #6, #7, #S, and #13 . Added additional cart storage at maintenance building and increased cart fleet size from 60 carts to SO carts . Spent over $40,000 in tree trimming . Resurfaced parking lot " . . With these recent .jmpr~JVements and that the majoritY, of rate changes are decreases; we feel these rate changes warrant approval. American Golfis committed to continuous improvement of the Chula Vista Golf Course through capital improvements, and customer serVice while creating the best value for the residents of Chula Vista. We appreciate your support with these changes. and look forWard to discussing them with you. _. /'" , / '\ \re- I . 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"i 13 o o ~ RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA AMENDING THE CITY'S MASTER FEE SCHEDULE AND ESTABLISHING NEW GREENS FEES AT CHULA VISTA MUNICIPAL GOLF COURSE WHEREAS, American Golf Corporation (AGC) submitted a request for rate changes to green fees for the Chula Vista Municipal. Golf Course on February 15,2006, and WHEREAS, AGe has made several recommendations for changes in green fees for resident and non-resident users; and WHEREAS, staff has reviewed AGC's proposals and recommends approving modified green fees rates with some changes to AGC's proposal, and WHEREAS, staff recommends setting non-resident rates at 25% above the resident rates for 18 holes on weekdays, and WHEREAS, the higher non-resident fees conforms to policy established in the Master Fee Schedule directing the Recreation Department to charge non-residents 25% higher fees for recreational classes; and WHEREAS, staff recommends that green fees for 9-holes, twilight and super-twilight for weekdays and weekends be set comparable to the average fees for Bonita, Balboa, Oceanside, and Coronado,.and WHEREAS, staff also recommends increasing the resident card from $8.00 to $1000; and WHEREAS, AGC proposes eliminating the senior tickets, thereby, eliminating the monthly $50 card, which allows seniors unlimited play on weekdays for only $2 per round, and WHEREAS, staff recommends keeping the senior tickets and "grand-fathering" existing card holders, which means they could still purchase the monthly card to take advantage of the lower rates, but no "new" additional card sales would be authorized, and WHEREAS, s:taff recommends increasing the ticket fee from $2.00 to $3 00 per round, which allows seniors unlimited play on weekdays; and WHEREAS, AGC proposes reducing the cart fee for seniors from $13 00 to $1100, and staff agrees with AGC's proposal regarding senior cart fees. 8-9 NOW, THEREFORE, BE IT RESOLVED that the City Council ot the City of Chula Vista, does hereby amend the City's Master Fee Schedule and establish new greens fees at Chula Vista Municipal Golf Course. Presented by Approved as to form by , ~j;oJ\~~~\-k Ann Moore City Attorney Dave Byers Director of Public Works Operations 8-10