WILMETTE PARK DISTRICT
 GOLF OPERATIONS COMMITTEE MEETING

Date: November 17, 2011   

Place: Golf Course

Time:  7:30 p.m.

Attendance
Commissioners: Brault, Murdock, Olvany, Benz, Shelley
Staff: Bowen, Matchen, Locke, Wilson
Visitors: Tom Bonnie, Fred Watson, Greg Martin

Topics of Discussion

1) Meeting Called to Order
2) Approval of Minutes
3) Communications and Correspondence
4) Managers Reports
5) Golf Survey
6) Golf Report
7) 2012 Golf Budget
8) Old Business
9) New Business
10) Adjournment

Discussion/Decisions:

1) The meeting was called to order at 7:30 p.m.

2) The Committee approved the minutes of the October 15, 2011 Committee  meeting by General Consent.

3) Under Communications and Correspondence: None

4) Under Managers Reports:

 Golf Club Manager/Head PGA Pro Jamie Locke reported that November rounds currently total 1,147 compared to last year’s 1,311 rounds. Total rounds for the year currently total 36,984 compared to 42,249 for the same time last year. The Men’s Club held their annual “Turkey Shoot” event last week Saturday which was very well received with 52 players and a shotgun start. He has also been meeting with his vendors for 2012 and returning items for credit on some deals he has made with a few manufacturers. A scheduling meeting was held with the ladies leagues this week which resulted in five leagues scheduled to play in 2012. Jamie will also start working on the upcoming holiday sales. In addition, the fall weather has been great with some days reaching temperatures near 60 degrees.

 Golf General Manager/Superintendent Mike Matchen reported that work on the course has been winding down outside for the season. Some part-time staff has been laid off although he is keeping a couple of extra seasonal workers for the drainage work which is starting on the first hole today. Open Kitchens will be closed from December 22 – February 8 when they will return to their regular
 schedule. Our facility will be the only one of their six which will be open during  the winter. The rest will not be opening until March.

5) Superintendent Jeff Bowen reported that as of tonight a total of 531 people responded to the golf survey and that in general it appears our members are satisfied with the course. However, several respondents believe that improvements should be made at the course including drainage and trap and green improvements. When asked if they would not continue to play unless improvements were made, the majority indicated they strongly disagreed and would continue to play whether the course is improved or not. They are also in favor of the master plan but don’t want any fee increases. They would be reluctant to play if construction was phased in over several years and 24% somewhat agreed.

 Commissioner Olvany stated his interpretation of those responses was a little different in that he felt there was very little consensus between closures vs. the phase-in improvements. He also thinks that generally speaking the golfers are concerned about the general conditions of the course, especially water and drainage which 95% of the respondents want approved. He also noted that 78.6% of the people indicated they would continue to play whether changes are made or not which was surprising to him. Also the golfers like our staff which keeps a lot of them coming back.  Commissioner Shelly stated she agrees that drainage was a key point but thinks that those who said that will remain at the course even if nothing was done. She also felt that the respondents didn’t feel that strongly about seeing the master plan implemented and that there were more comments to not proceed with the plan.

 Commissioner Olvany asked if there was any sense of who responded to the survey. Director Wilson explained that the survey was sent to all of our members. Committee Chair Brault asked if staff could do a second survey to those who had not responded and Director Wilson replied he would follow-up on that option. He added that the survey was sent as a web-link, is still on our web site and was strictly anonymous. Chair Brault suggested putting a summary of the responses on the web site as well.

6) Superintendent Bowen provided information from the Golf Report which indicated the course came through the winter better this year than in previous years. The spring was very wet and cold up until Memorial Day. Through May the rounds were down 31.6% which equates to about 6,300 rounds at that time and the course was down 6,350 at the end of October when this report was prepared. Memberships are up slightly at 6%. The lottery was held on March 8 and there were 61 foursomes which is two more than in 2010. The wet spring was followed by a dry summer until the end of July when 8 inches of rain fell in one week. Fortunately, the already dry conditions helped alleviate the water leaving the course fairly quickly compared to neighboring courses. The greens came through the summer pretty well even though they were stressed at some points. Currently, course revenue is up from last year by approximately $23 which was helped by better management of expenses. However, Mike also lost several experienced staff members who left this year for full-time jobs so he was under pressure to find replacements to maintain the course. As a result, labor costs were held at a good place although there was some extra overtime.

 Tom Bonnie stated that in general the course conditions especially later in the season were very good and Mike deserves a lot of credit for working so well with limited resources.

 Superintendent Bowen also reported that the number of rounds recorded this year was the lowest in the last seven years and non-resident rounds are basically half of what their peak was five years ago. Commissioner Olvany stated that although the number of non-resident rounds has dropped last year by 50%, the number of non-resident memberships increased over a period of time. His conclusion is that looking at the non-resident analysis demonstrates to him that our “product” is attractive whereas the residents are theoretically a kept audience. He added that the trend here seems to be very positive as far as what is attracting golfers to play here.

 John Olvany correction: On page 3 second full paragraph I’d like to add some wording into this that makes it clearer that what his point was that although the number of NR rounds has dropped last year by 50% that the number of NR memberships increased over a period of time.

 Discussion followed on the changes made to the unlimited lottery which allowed non-residents into the lottery system. Mr. Bonnie then presented some historical facts of how the lottery was conducted in the 1980’s.

 Chair Brault stated that when looking in the drop in rounds this year, almost all of that is the drop in unlimited play. The overall revenue path since 2008 has been essentially flat even though our rounds are down. It appears it has been the unlimited players who have changed. This is relevant when talking about potential funding for any improvements whether we do it on a per round basis or on an annual fee basis.

 Commissioner Olvany stated he did not read those numbers the same way as Chair Brault. The number of rounds on the chart that he saw was that the non-resident 18-hole play is down 50% from its peak in 2006. Mike Matchen stated that he believes that many of the “lost” non-resident rounds from five years ago have transitioned to unlimited play.

 Commissioner Shelly believes play at the course is weather-driven. Superintendent Bowen added there is a maximum amount of rounds that can be played in the prime season and having a good spring and fall is what will really make the difference in the bottom line since there is no room to squeeze in additional rounds during the summer. Once again, the course is very weather-dependent.

 After further discussion, Commissioner Shelly moved to accept the 2011 Golf Report and Commissioner Murdock seconded the motion.

 By a voice vote, voting Yes – 4; voting No – 0. Motion carried.

7) Superintendent Bowen reported on the 2012 Golf Budget and stated that in 2011 the course will be $180,000 down from budget in revenue and $68,000 down from last year in Golf Operations. Rounds were over 6,000 down as previously discussed. On a positive note, staff did a very good job of managing expenses and it is estimated that the course will be up $23,000 from last year. One item discussed last year at this meeting was making a change to the level of capital that was budgeted for contributions from this facility. In order to be somewhat similar to other summer operations such as the lakefront and pool, staff reduced that capital expenditure from $184,000 to $71,000 which was thought to be a more realistic number that the facility could actually produce.

 He added that as discussed at the other committee meetings, the lowering of the transfer to capital in this facility was increased in CRC Operations which is where the money has traditionally come from and not from this facility. Staff then took a look at the 2012 revenue numbers from a historical prospective and relied on averages from the last few years, and then increased that number by the recommended 3.5% which resulted in a more realistic increase than has been presented in the past. Commissioner Brault stated that he has trouble figuring out where that extra $81,000 in revenue is coming from and although he understands about raising fees, that didn’t translate into additional revenue either. He also does not have confidence that we’ll make these lower transfers because he doesn’t know if the extra $81,000 in revenues will be there. Mike Murdock stated he would be more comfortable with a budget that showed the revenue exactly where it’s been for the last four years and then showing the capital transfer.

 Commissioner Olvany agreed that he has been struggling with this same issue since it seems we’re projecting more revenue than we’ve had in the past few years and all the other items we’re looking at are down.

 Superintendent Bowen stated staff removed approximately $84,000 in revenue last year per the request from the committee to make the overall budget flat. Director Wilson added that the transfer was all surplus but it was still less than budget which is the danger of budgeting too high. Chair Brault agreed that we need to make this budget as realistic as we can and make it flat over the three-year average.

 Mr. Bonnie began a discussion concerning the internal service fund transfers and taking money out of this facility to fund other areas of the district. He stated that the internal service funds have gone up 3% or more every year. At some point, the internal service fund transfers will wipe out any surplus the facility can provide. Commissioner Brault stated that he could assure Mr. Bonnie that the users at other facilities, such as the ice rink, do not want to see these costs in that facility’s budget either. The internal service fund transfers are administrative expenses that are divided between the facilities based on the facility’s total expenses. The district’s philosophy has been to distribute these overhead costs back to the users of the park district and not to every household in the District in the form of increased taxes since the users pay this expense but not every household in Wilmette does. 

 Superintendent Bowen added that in his view when budgeting, you prepare a budget by estimating revenue though a historic basis. If your expenses do not meet your historic revenue, then you have to take a look at increasing the fees up to what the market can handle without losing business. After increasing fees, you still cannot meet expenses so then you have to start cutting services to lower your expenses. We believe there’s room for more fee increases. 

 Director Wilson stated that the internal service charges for the portion of Bill
Lambrecht’s department along with the Administration Office staff are allocated back to all of the operations. The Administration Office is allocated as a percentage of each operation’s expenses. We have also been tracking Bill’s staff’s time that they spend at the various operations and we may be shifting the percentages according to where they work. The overall philosophy is that the users are coming to us to use our services and are paying for those overhead costs. He believes that Jeff’s point is that we need to build all of that into our pricing models so that the expenses are not outpacing the revenue. The other option is that all those costs never get charged back to the operation but are put into the Corporate fund which is the burden of the taxpayers at large. In the future, the District will be looking at new accounting procedures that will call for more direct costs to be borne by those operations.

 Superintendent Bowen stated that what staff is recommending for 2012 is a fee increase of up to 5% in some areas over the recommendations of the Financial Planning Committee. Last year the Golf committee directed staff to increase membership fees by 5% in 2011 and an additional 5% in 2012. However, we did not raise some of the key fees that in hindsight which probably should have been raised in 2011. Staff’s recommended fees are estimated to increase revenue by an additional $83,000 over what was presented in the budget. When looking at the most expensive non-resident membership, staff is recommending an increase from $1,815 to $1,906.

 Commissioner Olvany stated he thought that this additional increase makes a lot of sense. Superintendent Bowen stated he believes that the added fee increases will produce $83,000 in additional revenue and is realistic if the play is similar to the spring and fall of 2010 and the summer of 2011.

 Additional discussion followed on the possibility of raising fees in certain areas which are higher than the staffs’ recommendation.

 Commissioner Shelly moved and Commissioner Murdock seconded a motion to increase fees as recommend by staff with the addition of a $1 increase to Non-Resident weekday 18-hole fee and a $.95 increase to Non-Resident weekend hole fee.

 By a voice vote, voting Yes – 4; voting No – 0. Motion carried.

 Commissioner Brault asked staff to review the average revenue amounts per round and suggest ways to increase that number by 5% in the future.
 
8) Under Old Business, discussion took place on the Master Plan and how the minimal amount of work could be done at the lowest cost to improve areas where drainage is a problem. Mike Matchen stated he was asked to put together an estimate on what he thought a “drainage-only” plan would cost. This estimate would allow for the installation of drainage pipe only with no grading or replacement of turf. He stated his estimate is divided into four sections: Drainage, rebuilding traps and adding necessary drainage and sand, the installation of new drainage under existing greens, and lengthening cart paths past the farthest tees.  This estimate was broken down into the following:  Drainage, $390,420; Traps, $533,000; Greens, $275,000 and Cart Paths, $101,920; for a total of $1,300,340.  He looked at each hole and estimated what he thought it would cost for drainage.   After analyzing the cost of the drainage work completed on the10th hole, he came to the conclusion that it would be more expensive to do the work in-house than to contract the work out.

 Chairman Brault stated that in light of the focus on drainage and what our users have indicated we should do drainage first, sand traps second, and greens third. He also believes we should move forward with some of the drainage spread over three years. Then in the second phase, we could look at the greens and determine whether to redevelop them. However, one comment he hears all the time is to not shut down the entire course to do the work.

 Greg Martin added that no one wants to ever close the course but the other part of the survey is that the course has drainage problems, cart path problems, turf problems, etc. But some users don’t want to close the course and you have to be sensitive to that but in an effort to rectify the issues you have to make some tough decisions. What the committee has been discussing will not begin to remedy the issues and it will not fix the problem but will mitigate it. You will still have water and it will be better drained but not much faster and there will continue to be the same issues. This project started as a drainage project and the more we got into it we discovered the true issues that existed here. There are 18 greens built in seven different decades and the drainage network is from the 1920’s and then built onto it. There have been newer additions that go a long way in dealing with the water but the drainage system is antiquated. So the project started as a drainage problem to fix that then grew into a larger infrastructure problem with greens, bunkers and overall drainage. The survey indicates that the majority of the users are concerned with drainage and bunkers and everyone has their preferences on what should be done. All of those issues in total have to be accounted for and that is why the District developed the master plan in the first place. When you build a bunker you do your drainage in the bunker and that then drains into the system. The work can be done at different times but if you have your patient opened up, take care of the patient and not go back and open them up again.

 Chair Brault stated he understands Greg’s perspective but he doesn’t think the Park District can afford to do the entire Master Plan and he will not be recommending a major upgrade of the course. Director Wilson stated that although we are not all in agreement on how much money should be spent on the project as discussed at the last Financial Planning meeting. Spending too little money and not do the project correctly to address the problems does not make sense. He stated he could appreciate the difference of opinion on what the cost should be and if we do not spend enough to make the project right, we should wait until we feel we can spend the money to do it correctly. If we’re not ready now, let’s wait to do it right.

 Chairman Brault stated that in his opinion he thought the overall effect the course would gain in playability and enjoyment is disproportionate to what the cost of the Master Plan is and what the members would receive as the end result. He stated that he did not think it’s was worth it. The change that people will look for won’t change that much for the golfers. We need to maintain the asset and make sure we’re protecting it over time as it degrades with age.

 Commissioner Shelly stated that she would strongly dislike putting this kind of money into what is being proposed now if it would not correct the problems. She stated that she has felt all along that $3.6 million which was first proposed was way too high but she would like to see real numbers and what that money could really do. She would like to have the real numbers for the “Master Plan Light” in order to see what $2 million would do to take care of the problems compared to spending the $3.6 million. Commissioner Murdock added the problem is that the master plan will make the course far better that it is today, but it’s not going to drive in additional revenue and that’s what we’re struggling with – it’s a major capital expenditure and maybe with no return on investment. Commissioner Olvany stated he thinks it’s a great plan but it seems like both the taxpayers of Wilmette and the users of the golf course agree they do not want to do the full Master Plan which would result in shutting down the course.

Greg Martin then provided a summary of what the “Master Plan Light” could include. There would be several projects such as tree removal that could be done in-house, handling the restoration of the irrigation a bit differently, and eliminating some of the additional features like the practice range improvements and putting greens.

 Mike Matchen stated he thinks that there is still a way to blend the two plans to get the most value for the money spent. Commissioner Shelly indicated that she does not think there is enough information to make a decision on what is the best way to blend the plans.

 Fred Watson stated that everyone should keep in mind that the users get really upset when projects impact play and that there are a lot of questions of which he doesn’t know the answers. However, he does not want to put off any work for another year. If we don’t have the money, we should not be doing the project.

 Commissioner Murdock added he is still struggling with the project. He stated that he is okay with a $1 or $1.5 million expenditure if it’s going to be a long-term improvement. He is not comfortable with spending $1.3 million over the next three years on something that will still be just a band-aid.

 Commissioner Olvany stated he thinks the drainage issue is real and it’s something that should be handled. He is not as convinced on the other aspects of the issues here as being as big of a problem. He thinks that we’re investing in the golf course and investing in the asset by trying to improve the drainage.
 
 Commissioner Shelly stated she does not want to spend any money if it’s just a band-aid. She would rather wait until the District could afford to do it right.  Director Wilson stated that he could assure the committee that the staff echoes the same feeling. Commissioner Shelly further commented that she would like to see what the blended plan would bring and does not want to spend any money if it’s not an effective solution.

 Commissioner Olvany stated he is not in favor at all of waiting and doing nothing. People expect something and have been hearing about this master plan for awhile and they expect some kind of fix to the drainage. He stated he does not have a problem with band-aids on some items.

 Commissioner Murdock stated we’ve done a good amount of work already on the course this year. One of the things going through this process was that he was surprised to hear it’s more expensive to do drainage in-house than contracting it  
 out. The question is what is the next step but he does not have enough information to answer that.

Chairman Brault stated that the committee needs to decide whether to make a fundamental change or not. If a decision is made to go with a blended plan, we need more information. But  if we decide we are not going in that direction we should be making incremental improvements which he does not think is a bad idea. However, there seems to be a difference of opinion among the committee members.

 Commissioner Murdock stated that there could be a way to do more work on some holes than others; for example, there could be four holes needing more substantial work and then five other holes that need less work.

 Mike Matchen stated that drainage work is usually done in the fall and he would like to have the opportunity to possibly blend the master plan and doing the work as we’ve been doing such as we did with 3 green. He added he would really like to grade the fairway and that there is a possibility of blending the work to do what needs to be done.

 After further discussion, staff was instructed to work on blending some ideas from the master plan and return to the committee in January.

 The next meeting was scheduled for Saturday, January 7, 2012.

9) New Business: None
 
10) There being no additional business, the Committee was adjourned at 9:56 p.m.

Minutes taken by J. Bowen

MINUTES APPROVED AS AMENDED ON JANUARY 14, 2012.