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HomeMy WebLinkAbout00A - Non-agenda Public Comments1 of 3 To: Palm Desert City Manager and City Council members: Our group of resident golfers has worked with City officials, staff and Kemper since 2014 in an effort to affect positive changes at Desert Willow and increase this 36- hole municipal golf resort's value to the City, other city business and All residents. Some progress has been accomplished including reinstating the Champions Club program, adding a Summer League Program, and starting Palm Desert's Annual City Championship Tournament. However, much work is needed to remedy the negative results of continuing the status quo operation of Desert Willow as this document will highlight. With an RFQ/RFP process due this year and the winter season around the corner, we are submitting the following in an effort to refocus City officials on specific details and results of the status quo operation of Desert Willow these past seven years. Hopefully City officials will address fiscally responsible opportunities to improve resident access in season, modify high operational costs resulting from the "Country Club Experience For A Day" marketing strategy and support discount privileges for ALL residents across Desert Willow's other four amenities including dining, pro -shop, range and Academy. Background: In December 2014, residents met with Mr. White and Mr. Nations together with Mayor Weber. When residents pointed out their access concerns and questioned whether the City had advised KSM of the privileges granted residents at this municipal golf facility documented by the City Council in 1997. Mr. White was unaware of any such document and stated KSM would manage Desert Willow any way the City wanted. Mayor Weber commented that it was now in the council's hands. And the council chose to continue supporting the status quo, limiting resident access while supporting costly operational expense levels, including the "Country Club Experience For A Day" marketing strategy. The City paid KSM $1.27M in bonuses from 2015-2021 even while Desert Willow was reporting -$2.8M in net losses these seven years, including annual operating losses from both the F&B and the Academy operations. Instead of working with residents to find fiscally responsible solutions protecting resident access in season, City officials insisted on continuing the status quo operation of Desert Willow. The following outlines the results of these decisions. 2 of 3 Desert Willow grossed $63M from 2015-2021. During those seven years they reported ($2.8M) in Net Losses. The City paid KSM $1.27M in bonus money in addition to one of the highest paid fix management fees in the CV while Resident access was decreased 48% since 2014. STATUS QUO QUESTIONS FOR STAFF AND COUNCIL: 1. Expense levels approaching $10M to operate a 36-hole municipal golf resort — continue status quo or adjust strategy? 2. Not protecting 1/3 of the morning rounds for residents in season — continue status quo or adjust strategy? 3. Selling the cumulative four visitor rack's rounds lower than charged in 2012 — continue status quo or adjust strategy? 4. Refusing resident discounts across all Desert Willow amenities — continue status quo or adjust strategy? 5. Rewarding management company with contract extensions and annual bonuses while reporting losses from F&B and academy and blocking resident access — continue status quo or adjust strategy? 6. Blocking second home owners access to obtain a Resident Golf Card by involving the DMV in the process — continue status quo or adjust strategy? 7. Continuing to falsify claims the City is subsidizing resident rates — continue status quo or adjust strategy? 8. Supporting the 20-mile non compete clause in management contract — continue status quo or adjust strategy? 9. Including management contact bonuses more than a decade after this practice was eliminated in the industry — continue status quo or adjust strategy? 10. Allowing non resident comps at a municipal golf resort — continue status quo or adjust strategy? 11. Operational losses annually for F&B and Academy — continue status quo or adjust strategy? 12. Driving operational costs up with "Country Club Experience For A Day" marketing strategy other country clubs in Palm Desert can't justify or afford — continue status quo or adjust strategy? 13. Only one council member on last RFQ/RFP selection committee — continue status quo or adjust strategy? 14. Inviting non residents to serve on RFQ/RFP selection committee in 2016 while ignoring this resident group — continue status quo or adjust strategy? 3 of 3 The City raised the resident rate 16% from 2013 through 2018 while Desert Willow lowered the cumulative Average Dollar Per Round (ADPR) for the other 4 visitor racks by -2% & -3%. By limiting resident's reservation option to 3-days and allowing 21-days and more for non-residents who purchase a $300 Platinum Card, few if any morning tee times were available in season for residents at the resident rate. The impact on residents with this status quo operation has been devastating, with resident access driven down 48% in 2019 compared to 2012. If the cumulative ADPR for the 4-visitor racks were raised the same levels as the resident rates prior to 2018 and 2019 Desert Willow would have generated an additional $1.7M in visitor revenues those two years. This detail suggests the dynamic pricing algorithms need adjusting to insure the cumulative ADPR results of the other 4 visitor racks are substantially areater in 2022 than they were in 2012. Will you continue to support the status quo — or make responsible adjustments required to maximize Desert Willow's value to the City, other city businesses and ALL residents? If you specify improvement objectives and goals in the next RFQ/RFP process, you could find multiple management companies, including KSM, who would define how to responsibly achieve such improvement objectives and goals. Hopefully this information will provide City officials the detail needed to improve Desert Willow's value for all in the future.