Golf Course Advisory Board Agenda and Packet 2014 11 17

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• LU still has received no response from the contractor on an estimate for running utilities to the future bathroom by hole #15. This has been slipping on a month by month basis for several meetings now. 7a. Staff review of golf course budget presented to City Council. Joe Stevens reported as follows: • The plan includes borrowing $400K from the Wastewater fund that will have to be repaid. The Board noted that this was contrary to the directive from Council that the renovation and start -up costs would be paid out of the General Fund so that the course would re -open with no debt other than the pre- existing debt to the Wastewater fund. Council Member Keany confirmed that this was his understanding also and Council Member Stolzmann had questioned this in an email to the City manager. This will have to be clarified as the budget discussions proceed between Staff and Council. • The business plan is based on a $55 rack rate ($41.25 average fee per round) and 18,000 rounds for 2015. This is based on Western Golf's 30,000 annual numbers pre - flood. The Board questioned if adequate comparisons had been made with competitive courses rack rate. • The Board noted that the business plan presented to Council was very much a best -case scenario given that the planned opening date is at the peak playing season and any delay or initial restriction on available rounds would have a significant effect. The Board suggested that a most - likely case budget would be more appropriate to use. Joe Stevens indicated that he was confident the bottom line could be met by controlling expenses if there was any delay in revenue generation. • The budget quotes annual revenue of $1,996,500 as expected revenue for 2016 as the first full year of operation. The Board noted that Western Golf annual revenue never exceeded $1.9M and that Indian Peaks has annual revenue of $2.3M. • John Meng asked if the Head Professional, when appointed, should finance and run the cart rental and pro -shop sales inventory as a "franchised" business. He had seen that model used successfully in West Palm Beach. Joe responded that the business climate in Colorado would be very unlikely to support such a model. • It was noted that the Coal Creek Golf Leagues will have to make commitments to other courses in January /February for play in the earlier part of 2015. There may be flexibility in returning to Coal Creek in late July if the course can be expected to open by the end of June. • It may be necessary to have a Cart -path only policy for golf carts in the first months of play, depending on the robustness of the new grass. • Joe reported that the lead -time for procuring golf carts is relatively short — carts can be ordered in April for June delivery. 4