HomeMy WebLinkAboutRes 2015-43 Resident Golf Rate at Desert Willow Golf ResortResolution No. 2015-43
CITY OF PALM DESERT
STAFF REPORT
REQUEST: APPROVE A RESOLUTION INCREASING THE RESIDENT GOLF
RATE AT DESERT WILLOW GOLF RESORT TO $49.00 BASED
ON THE CONSUMER PRICE INDEX
SUBMITTED BY: Martin Alvarez, Director of Economic Development
DATE: May 28, 2015
CONTENTS: Resolution No. 43
Resolution No. 2013-18
Recommendation
By Minute Motion:
1. Approve Resolution No. 43 increasing the resident golf rate at Desert
Willow Golf Resort to $49.00 for Fiscal Year 2015/16, 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
annual 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.
The average the cost per round over the last five 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).
FY
Cost Per Round
2010-11
$68.71
2011-12
$69.22
2012-13
$76.50
2013-14
$99.59
2014-15
$101.33
Resolution No. 2015-43
Staff Report
Resident Rate for Desert Willow
May 28, 2015
Page 2of3
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 $48.00 year round. The Average Daily Rate (ADR), including the resident play
over the last five years is summarized below:
FY
ADR
2010-11
$69.71
2011-12
$72.00
2012-13
$76.50
2013-14
$71.21
2014-15 ear to date
$74.02
Given that approximately 20,000 of all rounds at Desert Willow are resident rounds and
the ADR is $74.00, the non-resident play subsidizes the resident play by approximately
$26 a round and the resort is subsidizing the round cost by $27.
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 $48.00 to $49.00, using whole
dollar amount only, with 2010 CPI as the base year.
CPI Year
CPI %
CPI Adjustment
Proposed Per
Policy
Actual Resident Rate
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 1.290%
$0.62
$48.79
$48.00
2014
1 1.040%
$0.52
$49.30
$48.00
2015
10.510%
$0.25
$49.55
$48.00
*Resident Golf Rate for Fiscal Year 2015-16 = $49.00
The resident rate increase was not brought before the City Council at the end of CPI year
2014. At the end of CPI year 2015 the cumulative CPI increase is $.85 cents, thus
increasing the resident rate by more than one whole dollar from CPI year 2013.
Therefore staff recommends that the City Council adjust the resident golf rate from
$48.00 to $49.00 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 $65.00 today.
G.VdaWartin Alvarez\2015\SROWResident Rate-15.docx
Resolution No. 2015-43
Staff Report
Resident Rate for Desert Willow
May 28, 2015
Page 3 of 3
The arguments for utilizing CPI is that adjusting the resident rate would slightly modify
the rate from year to year avoiding larger, more controversial increases while allowing
the recovery of some increased costs to water, energy, fertilizer, seed, labor, 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
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 allow the City and
KemperSports Management to build a capital replacement account to maintain and
make continual improvements.
Submitted B
artin Alvarez
Director of Economic Development
Revi d:
Paul Gibson, Director of Finance
roved:
hn M. Wohlmuth, City Manager
Department Head:
ZIP
Rudy Aydbsta
Assistant City Manager
\\srv-h12k3\groupsVdaVartin Alvarez\2015\DWResident Rate-15.docx
RESOLUTION NO. 2015-43
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, 2015, the City of
Palm Desert hereby adjusts the resident golf rate from $48.00 to $49.00 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
AYES:
NOES:
ABSENT:
ABSTAIN:
Susan Marie Weber, Mayor
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
2015,
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
Increase
Actual
Increase
Actual Whole
$ 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
City Council held this 9th day of May, 2013, by the following vote, to wit:
AYES: BENSON, SPIEGEL, TANNER, and HARNIK
NOES: WEBER
ABSENT: NONE
ABSTAIN: NONE
JAN C. HA IK, MAYOR
ATTEST:
RA NELLE D. KLASSE , CITY CLERK
CITY OF PALM DESERT, CALIFORNIA