The URL can be used to link to this page

Home My WebLink AboutRes 2016-49 Increase Resident Golf Rate at DWGRCITY OF PALM DESERT STAFF REPORT REQUEST: APPROVE A RESOLUTION INCREASING THE RESIDENT GOLF RATE AT DESERT WILLOW GOLF RESORT TO $50.00 BASED ON THE CONSUMER PRICE INDEX SUBMITTED BY: Martin Alvarez, Director of Economic Development DATE: June 9, 2016 CONTENTS: Resolution No. 2016-49 Resolution No. 2013-18 Recommendation By Minute Motion: Approve Resolution No. 2016-49�increasing the resident golf rate at Desert Willow Golf Resort to $50.00 for Fiscal Year 2016/17, based on Consumer Price Index (CPI). Background Upon the opening of the Desert Willow Golf Resort in 1997, the resident golf rate was established by City Council at $45.00 per round. Since the opening of Desert Willow Golf Resort, the resident golf rate remained unchanged until 2013. In 2013, the City Council approved Resolution No. 2013-18 (see attached) establishing a policy to make adjustments to the resident golf rate based on the annual CPI and only by whole dollar increments. As part of Resolution 2013-18, the City Council adjusted the resident golf rate from $45.00 to $48.00, using FY 2010/2011 as the base CPI year. Based on the new resident golf rate policy of adjusting the resident golf rate by CPI in whole dollar increments, in July of 2015, the City Council adjusted the resident golf rate to $49.00. The average cost per round over the last seven years is summarized below. The average cost per round is established with a formula of adding the golf -related expenses and dividing the total by rounds played (not including depreciation, capital expenses, interest and management fee). Staff Report Resident Rate for Desert Willow June 9, 2016 Page 2 of 3 FY Average Cost Per Round 2010-11 $68.71 2011-12 $69.22 2012-13 $76.50 2013-14 $99.59 2014-15 $103.92 2015-16 $108.34 Desert Willow Golf Resort averages over 85,000 rounds of golf per year and approximately 20-25% of the rounds come from residents. The rates for non-residents vary depending on the time of the season and the time of play. The resident rate is currently $49.00 year round. Given that approximately 20,000 of all rounds at Desert Willow are resident rounds and the Cost per Round $108.15, the resort is subsidizing the resident round by approximately $59.15. Discussion The 2013 resident golf policy established an annual review of the resident golf rate, with consideration to increase the rate based on the annual CPI from March to March, for the Los Angeles, Long Beach and Riverside area using only whole dollar increases. The following table illustrates the proposed increase from $49.00 to $50.00, using whole dollar amounts only, with 2010 CPI as the base year. CPI Year CPI % CPI Adjustment Proposed Per Actual Resident Rate Policy 2010 1.860% $0.84 $45.84 None ($45.00) 2011 3.000% $1.38 $47.22 $47.00 2012 2.020% $0.95 $48.17 $48.00 2013 1.290% $0.62 $48.79 $48.00 2014 1.040% $0.51 $49.30 $48.00 j 2015 0.510% $0.25 $49.55 $49.00 2016 1.700% $0.84 $50.39 *$50.00 *Proposed Resident Golf Rate for Fiscal Year 2016-17 = $50.00 At the end of CPI year 2016 the cumulative CPI increase was $.84 cents, thus increasing the actual resident rate from $49.55 to $50.39, which translates to over a whole dollar increase from CPI year 2015. Therefore staff recommends that the City Council adjust the resident golf rate from $49.00 to $50.00 per round. If actual CPI would have been implemented annually to the resident rate over the last 15 years, the actual resident rate would be $69.00 today. The arguments for utilizing CPI is that adjusting the resident rate would slightly modify G \rda\Mart.n Alvarez\Desert Willow\Resident Rates\DWResident Rate-2016 (4) docx Staff Report Resident Rate for Desert Willow June 9, 2016 Page 3 of 3 the rate from year to year avoiding larger, more controversial increases while allowing the recovery of some increased costs to labor, water, energy, fertilizer, seed, equipment, etc. An additional consideration to justify the increase to the resident rate is that artificially keeping the resident rate far below the cost of golf rounds impacts the private golf club's ability to attract new members, especially residents. Fiscal Impact The proposed increase in the resident rate from $49.00 to $50.00 is estimated to increase golf revenue by approximately $20,000. These funds will assist with offsetting increases in labor, materials and utilities for next fiscal year. Although Desert Willow is not a current burden on the City's General Fund, without RDA funds for large capital expenditures, an increase in revenues will also allow the City and KemperSports Management to build a capital replacement account to maintain and repair the wear and tear to the golf course and facilities. Submitted B Martin Alvarez Director of Economic Development Reviewed: ane oore, Director of Finance Approved: ,�,44 * s n McCarthy, Interi anager la4 - ( Department Head: Rudy Y Assistant City Manager C \rdaNarLn Nvarez\Desert W IoMResident Rates\DWResident Rate-2016 (4) docx RESOLUTION NO. 2016-49 A RESOLUTION OF THE CITY OF PALM DESERT ADJUSTING THE RESIDENT GOLF RATE AT THE DESERT WILLOW GOLF RESORT BASED ON CONSUMER PRICE INDEX WHEREAS, the City of Palm Desert has developed two public golf courses to provide for recreational facilities; and WHEREAS, the City of Palm Desert has certain obligations in accordance with that certain agreement with the Management Company of the Golf Resort to establish and set said green fees; and WHEREAS, the City of Palm Desert desires to provide for reasonable rates to play said golf course for its residents of the City; and WHEREAS, the City of Palm Desert City Council approved Resolution 2013-18 establishing a policy of adjusting the resident golf rate annually based on utilizing the annual Consumer Price Index, March to March, for the Los Angeles, Long Beach and Riverside area by whole dollar increases only; and NOW, THEREFORE BE IT RESOLVED, that effective July 1, 2016, the City of Palm Desert hereby adjusts the resident golf rate from $49.00 to $50.00 based on utilizing the annual Consumer Price Index, March to March, for the Los Angeles, Long Beach and Riverside area; ALSO BE IT RESOLVED, that the City of Palm Desert reserves the ability to adjust said rates from time to time. PASSES, APPROVED AND ADOPTED the day of June 2016, AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, MAYOR ATTEST: RACHELL D. KLASSEN, CITY CLERK CITY OF PALM DESERT, CALIFORNIA \\srv-fd2k3\groups\rda\Marbn Alvarez\Desert Wllow\Resident Rates\Resolution DW Green Fees2016 docx RESOLUTION NO.2013 -18 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM DESERT, CALIFORNIA, ESTABLISHING THE RESIDENT GREEN FEES BY CONSUMER PRICE INDEX (CPI) AT THE DESERT WILLOW GOLF RESORT FOR FISCAL YEAR 2013-2014 WHEREAS, the City of Palm Desert has developed two public golf courses to provide for recreational facilities; and WHEREAS, the City of Palm Desert has certain obligations in accordance with that certain agreement with the Management Company of the Golf Resort to establish and set said green fees; and WHEREAS, the City of Palm Desert desires to provide for reasonable rates to play said golf course for its residents of the City. NOW, THEREFORE BE IT RESOLVED, AS FOLLOWS: The City of Palm Desert hereby adjusts the resident green fees effective with Fiscal Year 2013-2014 based on utilizing the annual Consumer Price Index (CPI), March to March for the Los Angeles, Long Beach and Riverside area, to determine the adjustment to the resident rate by whole -dollar increase only: The adjustment shall be made based upon the following table using 2010 as the base year: Fiscal Year CPI $ Rate Actual Actual Whole Increase Increase $ Increase 2009-2010 1.860% $0.84 $45.84 None ($45.00) 2010-2011 3.000% $1.38 $47.22 $47.00 2011-2012 2.020% $0.95 $48.17 $48.00 2012-2013 1.290% $0.62 $48.79 $48.00 The resident rate effective July 1, 2013, shall be $48.00 per round per resident. RESOLUTION NO.2013 - 18 PASSED, APPROVED, AND ADOPTED at a regular meeting of the Palm Desert 0" City Council held this 9th day of May, 2013, by the following vote, to wit: wo AYES: BENSON, SPIEGEL, TANNER, and HARNIK NOES: WEBER ABSENT: NONE ABSTAIN: NONE JAN C. HA IK, MAYOR ATTEST: RA HE LE D. KLASSE , CITY CLERK CITY OF PALM DESERT, CALIFORNIA pq No am .r CITY OF PALM DESERT MEMORANDUM To: Janet Moore, Director of Finance From: Martin Alvarez, Director of Economic Development Date: May 27, 2016 Subject: Fiscal Year 2016117 Out of State Travel Requests As part of the Fiscal Year 2016/17 Budget, the following out of state travel is requested. Conference The Lodging Conference 2016 The Lodging Conference 2016 American Marketing Association Annual Conference International Conference for Shopping Centers International Conference for Shopping Centers i International Conference for Shopping Centers The above conferences budget for FY 2016/17. extension 467. Location Staff Dates Phoenix, AZ Rudy Acosta, September 2016 Assistant City Manager Phoenix, AZ Martin Alvarez, September 2016 Director of Econ. Development Orlando, FL Thomas Soule, October 2016 Tourism & Marketing Manager Las Vegas, NV Ruth Ann Moore, May 2017 Econ. Development Manager Las Vegas, NV Martin Alvarez, May 2017 Director of Econ. Development Las Vegas, NV Rudy Acosta, May 2017 Assistant City Manager are budgeted in the Economic Development Department If you have any questions, please feel free to contact me at cc: Justin McCarthy, Interim City Manager Rudy Acosta, Assistant City Manager Ruth Ann Moore, Economic Development Manager Thomas Soule, Tourism & Marketing Manager G \Econ Development\Martin Alvarez\2016\Memos\FY 16-17 Out of State Travel doc