Fort Walton Beach Council agenda — 06-21-05 — reading text

Council Approved Rate Study 2 FY 2005- 06 Budget - Department Request & City Manager Proposed 3 14 2 Policy Decision - Golf Carts 15 Policy Decision - New County Memberships 16 Policy Decision - Capital Surcharge 3 Statistics - Total Golf Rounds Played ( Annual Comparison) 17 Statistics - Total Rounds by Type ( year-to- date) 18 Statistics - Rounds by Type and Player ( year- to- date) 19 Statistics - Total Cart Rentals by Type ( year-to- date) 20 Statistics - Cart Rentals by Type and Player ( year-to- date) 21 Statistics - Walking Rounds by Type and Player ( year-to- date) 22 4 Statistics - Green Fee Revenues ( Annual Comparison) 23 Statistics - Cart Fee Revenues ( Annual Comparison) 24 Statistics - Driving Range Revenues ( Annual Comparison) 25 Statistics - Membership Fee Revenues ( Annual Comparison) 26  Introduction Ocerations & Course Conditions On March 22, 2004 City Council presented the Golf Club Administrator and his staff with a proclamation in recognition of their hard work at the golf club to improve course conditions and increase play. Players have also complimented staff on the remarkable turnaround. Rounds through April total 55, 136, which is 9. 38% or 5, 710 rounds less than last year, despite staffs hard work to maintain top- notch course conditions and recruit new tournaments. Hurricane Ivan damaged bulk- heads and cart paths and the record- setting spring rainfall not only hampered repair efforts, but caused additional damage to bulkheads. Financial Condition As a result of a comprehensive operations and fee schedule review, Council adopted a multi- year rate plan in March 2004 with annual rate increases. The second year rate increases were effective June 1, 2005. Golf operations experienced a net loss of <$298, 778> for the year ending September 30, 2004 compared six to <$ 306, 990> the year. Golf course operations have nearly broken even through the first previous months of this year, experiencing a loss of only <$ 1, 773>. Nonetheless, a cash shortfall of <$379, 500> is anticipated by year- end, which is less than projected during the rate study. The cost of producing one round of golf is budgeted at $ 25. 59 in FY 2004- 05 based on 97, 000 rounds. In comparison, members may walk 18- holes for $ 5. 00 and ride 18- holes for $ 16. 50. Eauicment & Cacitallmcrovements Excellent course conditions are key in achieving high levels of play. Course conditions are dependent on several factors including equipment, infrastructure ( e. g. bulkheads, cart paths, irrigation), storage buildings, and weather. Proper equipment and storage facilities translate to better and more efficient course maintenance. Bulk- heads prevent erosion and cart paths prevent soil compaction and tire ruts, thereby rain and drought reducing maintenance expense. Weather also impacts course playability, as both excess affect the course. in In order to minimize rate increases and still achieve financial stability, the expenditure levels projected the multi- rate year reflected delayed equipment replacements and minimal capital improvements. plan and However, equipment replacements are needed to maintain course conditions and bulkhead, seawall, rains. Revenues are not bridge repairs have been necessitated by Hurricane Ivan and recent heavy to cover these which were not anticipated at the time of the rate study. projected expenses,  FY 2005-06 Projected Budget - Council Approved Rate Study Actual Projected 2002- 03 2003-04 2004-05 2005-06 2006- 07 2007- 08 REVENUES: Current Revenue 2, 056, 803. 55 2, 174, 182. 00 2, 195, 923. 82 1, 975, 306. 31 1, 995, 059. 37 2, 015, 009. 96 240, 175. 00) County Member Effect New Revenue 1 93,341 95,000 95,000 97,000 99,000 101, 000 Total Paid Rounds 58, 159. 00 73, 514. 00 89, 139. 00 105, 539. 00 Membership Fees - Current 63, 500. 00 67, 800. 00 72, 700. 00 77, 300. 00 Membership Fees - New County Green Fees 147, 775. 00 210, 821. 25 252,544. 10 295, 851. 53 126, 125. 00 192, 614.25 231, 801. 12 272,478. 42 Cart Fees 395, 559. 00 544, 749. 50 646, 184. 22 751, 168. 94 Total New Revenue2 2. 056, 803. 55 2, 174, 182. 00 2. 351 ,307. 82 2520055.81 2. 641 ,243. 59 2. 766, 178. 91 Total Revenue EXPENSES: 1, 053, 892. 00 1, 141, 830. 00 1, 041, 830. 00 1, 083, 503. 20 1, 126, 843. 33 1, 171, 917. 06 Personal Services3 762, 814. 00 771, 383. 00 671, 383. 00 684, 810. 66 698, 506. 87 712,477. 01 Operations & Maintenance4 9, 907. 00 1, 085. 00 - - - - Capital Outlay Debt Service 546, 762. 00 589, 946. 00 561, 538. 55 551, 625. 98 585, 364. 63 549, 548. 26 97, 044. 00 20, 000. 00 30, 000. 00 40,000. 00 40, 000. 00 Contingencies/ Other Total Operating Expenses 2, 373, 375. 00 2, 601, 288. 00 2, 294, 751. 55 2, 349, 939. 84 2,450, 714. 83 2, 473, 942. 33 131, 977. 00 20,000. 00 20, 000. 00 20, 000. 00 20, 000.00 20, 000. 00 Capitallmprov. Projects5 2. 505. 352. 00 2. 621 ,288. 00 2, 314, 751. 55 2 369. 939. 84 2,470. 714. 83 2.493, 942. 33 Total Cash Outlays 448, 548.45) 447, 106. 00) 36, 556. 27 150, 115. 97 170, 528. 76 272, 236. 58 Annual Excess/( Shortfall) 318, 015. 92 130, 532. 53) ( 577, 638. 53) ( 541, 082.26) ( 390, 966. 29) ( 220,437. 54) Beginning Balance 130, 532. 53) 577, 638. 53) ( 541, 082. 26) ( 390, 966. 29 ( 220,437. 54) 51, 799. 04 Cumulative Excess/( Shortfall) NOTES: 1Paid Rounds are projected to increase 2% annually 2New Revenue is projected at 6% annual rate increase in FY 2005- 06 onward 3Personal Services expense is projected to increase 4% annually 40perations & Maintenance expense is projected to increase 2% annually 5Capitallmprovement Projects limited to cart paths as a cost control measure U: IFinanceIBudget 05-06\Miscel aneouslGolf Advisory Review.xls 61312005 8: 09 AM 1a 2  GOLF CARTS Policv Decision Should the golf cart lease be renewed? Backaround The City currently leases 160 electric golf carts from Club Car. The final monthly lease payment of $ 8,471. 59 is due in May 2006. Discussion Approximately 72% of Florida courses lease carts; compared to 65% in AL, 62% in MS, and 63% in LA according to a recent survey by the Florida Golf Course Superintendents Association). Local courses surveyed ( Bluewater, Foxwood, Indian Bayou, Kelly Plantation, Regatta Bay, Seascape, & Shalimar Pointe) all lease carts and stated that electric carts are cheaper and quieter than gas carts. Five of seven local courses have a cart fleet between 70 - 80 carts for 18 holes. The average fleet for an 18- hole course in Florida is 59 carts; compared to 52 in AL, 45 in MS, 51 in LA, and 51 in TX (according to a recent survey by the Florida Golf Course Superintendents Association). Club Car estimates an average fleet of 70- 75 carts per 18- holes. Club Car will be meeting with the Golf Club Administrator in mid- June to discuss an early replacement of the fleet and other options. Policv ImDact The City' s five- year old carts may be purchased if a balloon payment of $ 128, 000 is made in June 2006. Funds for the purchase are currently not available from golf revenues. Leasing provides a new fleet of carts every 5 years and minimizes maintenance costs. Routine operating and maintenance costs increase significantly after the 4th or 5th year of use. For example, at that time new batteries and tires are often needed. The cost of replacing the batteries in the entire fleet is estimated