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5-28-14 Golf Com Excerpt EXCERPT OF THE GOLF COURSE ADVISORY COMMITTEE MEETING HELD IN COMMISSION CHAMBERS, CITY HALL, 100 E. BOYNTON BEACH BOULEVARD, BOYNTON BEACH, FLORIDA ON WEDNESDAY, MAY 28, 2014 AT 4:00 P.M. PRESENT: Jack Ekelchik Ron Tapper, Golf Course Manager Mark Frederick Glenn Landgraf, Golf Course Superintendent Pam Rothman ABSENT: Judy Conwell Arthur Matthews Terry Aperavich Lori LaVerriere Matthew Gilbert Excerpt requested by Carisse LeJeune (Begin transcription) IV. New Business A. Proposed Rate Increases 1. Daily Fee, Links Club Card, Annual Permit Holder 2. Additional Services (Golf Handicap, Bag Storage, Locker Rental) B. Additional Permit/LLC Options 1. All- Inclusive Permits 2. Early Annual Purchase (13 -Month Permit or LLC) Mr. Tapper explained there were many projects and items the golf course needs. Over the last six or seven years, each golf course in the area declined due to the economy, but the economy was presently rebounding. The course fee comparisons were reviewed as were total cart and green fees, excluding the County golf courses. Mr. Tapper reviewed the rounds played in 2012/2013 and 2013/2014. There were more bad weather days in the 2013/2014 season compared to the prior fiscal year, and it impacted revenues. Meeting Minutes - Excerpt Golf Course Advisory Committee Boynton Beach, Florida May 28, 2014 Mr. Tapper reviewed the various fees at The Links and clarified "DF" were the Daily Fee players. These players did not have a Links Club Card (LCC) or Discount Card and were not Annual Permit Holders (APH). Mr. Tapper pointed out The Links rates included tax and was in the middle of the rate structure of other golf courses. In spite of play improving, rates had to increase because staff cut everything to the bare bones due to the economy, and the course did not receive enough revenue to keep up with the expense side. There are no reserve funds remaining as it had been used to fund the shortfall in operating expenses. Additionally, The Links does not receive taxpayer funds and must subsidize its own operation. Mr. Ekelchik inquired how many rounds per week were being played by the average golfer using The Links as their primary course and how the economy affected play. Mr. Tapper's best estimate was individuals who previously played four times a week were playing two or three times a week. A three times a week player was playing two or three times a week and a twice a week player was playing once a week. Those who formerly played once a week may not play anymore due to the economy. Mr. Tapper responded they tried different approaches to attract more players to the course, but they will not devalue the course. The management team with the City agreed and will not allow a fee of $10 to $14 a round because it will destroy the Course. Mr. Tapper emphasized it was not about how many players were on the course, rather it was the quality of the golfers and what was paid per round. The cost to play a round needed to be increased to stimulate the customer base, increase the number of permit holders and Links Club Card holders. Staff will introduce an All- Inclusive fee this year to give golfers a choice. If they play three times a year, they would save. There would also be more options available. Mr. Tapper noted, except for permit fees, the rates have not changed since 2009 when daily fees were increased to $59. In 1994, Joe Sciortino, former Links Golf Director had stated, "The history of the golf course has been one of raising permits one year and raising greens fees the following year. It is an endless cycle that must continue unless you get more dollars per round." The business was cyclical and the cycle stopped when the economy collapsed. Staff was cut and not replaced and as a result, the course maintenance suffered. Chemicals and other items are used and the cost went up, except the price of the play. A golf course is hard to maintain when there are budgetary cuts. Golfers notice when the aesthetics decline and then the customer base starts to deteriorate. There was a slight increase in the permit fees last year, and in the past, all plays had tax included which would be changed to the fee, plus tax. The proposal was to increase from $59 for Prime Time Non - Resident, to $61 plus tax in the height of the season. He noted staff carefully tracks who plays before 11 a.m. Cypress Creek cost $65 to play and Atlantic National charged $75. Boca Municipal was $55 for those without a permit, and Winston Trails was believed to be $58. Delray Beach was $50, but their annual 2 Meeting Minutes - Excerpt Golf Course Advisory Committee Boynton Beach, Florida May 28, 2014 permit was $1,550 and they charged $21 per cart. Boynton's annual permit was half that amount. Generally, they were the same, but it was important to realize the difference between them was where they were obtaining revenue and where they were using it. A Cypress Creek non - resident, annual permit was $799 plus tax and their cart prices were $24. Their prime time, non - resident fee was $65 and their Loyalty Card holder fee was $52 which was a savings of $13, but it was the rate Cypress Creek wanted for their Sunshine Card. Boynton's Sunshine Card changed to $49 from $59. The new rate would be $50 for The Links Club Card plus tax. Instead of paying $61 for a card, patrons would be paying $50 at the height of the season realizing an $11 savings as opposed to the daily fee. There would be additional savings with a Permit and /or an All Inclusive Card. A review of the breakdown of cost per play time which was contained in the handout attached to the minutes was given. One area staff was looking to revise, which was not included was the "Open to 11 a.m." tee time. Staff would revise that window to "Open to 11:30 a.m." When staff reviewed other golf courses, many start revising their fees at noon and staff sought to gain an additional half hour of higher revenue and incorporate what they needed where they were falling short. Mr. Ekelchik recommended relying on Mr Tapper's expertise and supporting his recommendations. The revenue was to make ends meet. Staff did not know, come October, how this change would impact the course. Some golfers may leave thinking The Links was not worth $61 or would not have the funds for a permit at that time, but he asserted if players did not see improvements at The Links in the last year, they would when they returned. In order to build reserves on top of the proposed increases, they had to increase rounds played. Rounds will increase via the improved aesthetics. Staff had already noticed more people playing, but did not know how many players The Links lost because of the old aesthetics, but there are groups calling wanting to come. The Links was coming back. The rates Mr. Tapper proposed and the rounds played were to basically break even. Mr. Frederick suggested coming up with a whole dollar amount and backing the taxes out. Chair Rothman commented many players do not pay attention to the tax and most pay with a charge card. Mr. Frederick further inquired if consideration had been given to a six -month permit since other courses have a summer or winter membership. Seasonal players would not buy a permit. He was unsure if the goal was to increase permit holders. Mr. Tapper responded there would be options. One option would be for an All- Inclusive Card for $3,400. Mr. Tapper calculated someone who played three times a week all year would save about $600 a year. If some played more during the season, there would be a greater savings. Mr. Tapper had 3 Meeting Minutes - Excerpt Golf Course Advisory Committee Boynton Beach, Florida May 28, 2014 already spoken to other interested individuals about it. There would be a difference between an All Inclusive and a Permit which will cover a locker and bag storage. Another option was the Club Card. The cost of the Club Card had not been increased since inception and was $50 plus tax. Last year, it was $70 plus tax which included the handicap. Since the handicap was $20, the amount was not increased, rather it was grouped together. Staff proposed a $90 fee which would be split $65 for the Club Card and $25 for the handicap. Some golf courses have a $40 handicap. Others charged more. However, staff did not intend to undercut. On Mother's Day /Father's Day, The Links has a cart special, but a permit holder, if participating in the special, would pay the nine -hole price and would not pay the same price as a non - permit holder. Other golf courses will send emails and try to undercut times. The Links does not do that. They do not barter tee times or guarantee anyone tee times. Chair Rothman hoped the aim was not just to cover the reserves and thought the rates should be higher. Mr. Tapper thought that would be harmful to The Links. She inquired if individuals would balk at paying $3 more a round. Mr. Tapper pointed out it was already $59 including tax and would be increasing to $64, a $5 increase and that was just the daily fee not including the Club Card. He did not know the ramifications. Chair Rothman did not want to see the golf course go through the same cycle as Mr. Sciortino did. She thought some would complain about anything and if The Links would request an increase, they should do it all at once, but have a sell aspect. She commented the Links has many good things going on and the course would sell itself. She understood if seed was needed, there must be money for the seed. Mr. Tapper did not want to out price the course. He noted during the summer time, there was heavy competition and they reversed the rates and added 6% sales tax. During season was different. The Links had to concentrate on November through April. Chair Rothman commented The Links winter, high season, non — resident prime -time rate was $61. She thought the daily fees charged by other courses, ranging from $55 to $75, all had the same amount of rain dates and were in the same situation. Mr. Ekelchik agreed and inquired if it would be better to increase the price to $63 or $64. Some increase was warranted to make up the shortfall. Mr. Frederick explained when players left for the season, they were not that happy with the course and would not know about the improvements until they returned. He was unsure they would want to pay the increased fee. Discussion followed people were negative by nature. Mr. Ekelchik commented his course was a pristine property and he was present and played The Links when the lakes were cleaned and trees trimmed and the difference was amazing. The Links was a great property. If an increase was needed, the administration should move forward and make money. 4 Meeting Minutes - Excerpt Golf Course Advisory Committee Boynton Beach, Florida May 28, 2014 Chair Rothman cautioned the selling aspect was important. Mr. Tapper explained the Board's approval of the increase was the first step, followed by a decision by the City Commission. Mr. Tapper explained there was progress, but they want to start selling permits and Club Cards in August. When someone first comes in, they could offer free play in August and September because during the summer, nothing goes on anyway and it was an extra bonus. All golf courses aerate the greens during the summer. Staff did not want to wait to sell the product. Mr. Ekelchik agreed and did not want to sell the course short. The increase was not astronomical. If the price of $61 did not achieve the needed results, it should be increased to $65 to avoid a second increase. Mr. Tapper explained the proposed increase to $61 was not the main increase. The main increase was The Links Club Card held by the primary golfers. Most people who play The Links have the Club Card. Mr. Ekelchik noted the increases also followed in the Club Cards and Annual Permit Rates. The $61 rate was for someone who walked in off the street. A Club Card would be $70 with the Handicap this year and the rates to play would be $50 plus tax this year. Previously it was $49 including tax. Mr. Ekelchik thought the rate to play with the Club Card should be $54 or $55. The increase proposed for the Club Card was $65 per person and the handicap will increase from $20 to $25. The permit would be $725 plus tax and it would include the handicap. The Permit and All Inclusive rate included the handicap. The down side to the All Inclusive Card was it required the funds up front. Mr. Tapper understood and had spoken with some individuals. If the player was a year -round player, it was another option to offer. With the All Inclusive, the player did not have to worry about rain checks and just worry about tee time. The comparisons with other golf courses showed the rates at The Links were the same everyday where other courses had rates that fluctuated by the day. Boca Municipal had the same setup as The Links, but did not have permits, although they had resident rates. They charged $36 in the summer and The Links charged $31. Mr. Ekelchik thought it was important to sell the product and not worry about the price. When the product is sold, players will pay it to get the product. He favored increasing the price and working hard to get that message out. He thought staff should market The Links and invite players to see the new product. Mr. Frederick inquired if the proposed rates would generate enough revenue to do what needed to be done at the golf course for the next year. Mr. Tapper responded it was to make ends meet. Chair Rothman commented the daily fee rate increased from $59 to $61 and did not include tax. She thought it should be $62. The more significant increase would be at The Links Club Card. She suggested an increase to $52. She thought many golfers would not notice the tax. Mr. Tapper explained with The Links Club Card, the daily fee will increase anyway. One offsets the other. Chair Rothman thought staff was giving 5 Meeting Minutes - Excerpt Golf Course Advisory Committee Boynton Beach, Florida May 28, 2014 the product away. Mr. Tapper explained they previously had 1,000 Club Card members and they were down to 550. Chair Rothman pointed out there were two huge communities under construction around the corner from Osprey Springs and those residents should be targeted for play. More young players were needed and Boynton Beach was flourishing. She thought The Links should be making deals to draw players or organizing a Links group in those communities. The Valencia residents could play and many younger players that could be shown The Links. She thought it was important to contact the developer and hand out material there. Mr. Tapper explained they were limited to $10K in their advertising budget and discussion followed if the developers were contacted they could try the course. Mr. Ekelchik agreed and thought the fees were not increased enough. He believed in the product. Mr. Frederick agreed an increase of $1 or $2 was fine, but was unsure about coming back in a year for another increase. He was concerned about getting too much upfront. Golfers can be shown a good product and would be aware there would be an increase, which would be understood. He thought they should show golfers a very good product and they come back for more. He thought the proposal was appropriate, especially with the savings from players paying the sales tax. He suggested rounding the fees up to the nearest dollar. Chair Rothman commented if they capture players this year and they have the extra capital, they would see the progress when they are playing as opposed to a picture on marketing materials. Players will see their investment and she stated "One doesn't get something for nothing." Mr. Tapper agreed and emphasized the comments from Joe Sciortino. It was not possible to have the same fees every year. Mr. Ekelchik was involved with the golf course at Hunters Run and explained the cost of materials was constantly increasing. He thought they were selling themselves short and he favored higher fees. Mr. Frederick suggested looking into six -month memberships. He thought more individuals would be interested in the permit with the six -month membership and thought that would be a source of revenue as it would attract golfers that were going to competing courses. Motion Chair Rothman moved Mr. Tapper has the Board's authority to raise the "gray column numbers" one or two dollars depending upon Mr. Tapper's discretion. Mr. Tapper clarified Chair Rothman was referring to the proposed rates for the daily fee rates, The Links Club Card and the Annual Permit Rates. Mr. Ekelchik seconded the motion that unanimously passed. 6 Meeting Minutes - Excerpt Golf Course Advisory Committee Boynton Beach, Florida May 28, 2014 Mr. Ekelchik thanked Mr. Tapper for his work and offered to assist with programs or in any other manner. Mr. Tapper explained he met with Mr. Merker and invited the members to The Links. He felt better days were coming. The market was saturated and private courses were looking for outside play, which never happened before. Mr. Ekelchik commented even the ultra - private courses were allowing outside play. Chair Rothman requested have a meeting sooner than three years. She thought it was important the Committee get the right information out. Mr. Tapper also commented he will get new Committee members to fill current vacancies and Chair Rothman suggested the Committee meet on a more regular basis. Motion There being no further business to discuss, Chair Rothman moved to adjourn. Mr. Frederick seconded the motion that unanimously passed. The meeting was adjourned at 5:33 p.m. (Excerpt concluded.) , p Catherine Cherry Minutes Specialist 061614 7