Mayor Sanders has released a "Fact Sheet" on his Five-Year Golf Plan - some of the "facts" are inaccurate and/or misleading.
Mayor Sanders Five-Year Plan "Fact Sheet" was just received by SDMGA. Below is our detailed reply to the “Fact Sheet”. Our response is intended to help evaluate both sides. We are deeply concerned that that three of the principal statements in the “Fact Sheet” are inaccurate and/or misleading.
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San Diego Municipal Golfer’s Alliance
P.O. Box 22575
San Diego, CA 92192
June 25, 2006
To: City Councilmembers Tony Atkins, Kevin Faulconer, Donna Frye, Ben Hueso, Jim Madaffer, Brian Maienschein, Scott Peters (President), Tony Young.
From: John Beaver, Joe Burwell, Paul Spiegelman, Co Founders of SDMGA.
Subject: Response to Mayor Jerry Sanders Golf Operations Five-Year Plan “Fact Sheet”
Dear Councilmembers,
Enclosed is our detailed reply to Mayor Sander’s Golf Operations Five-Year Plan “Fact Sheet”. Our response is intended to help you evaluate both sides. We are deeply concerned that that three of the principal statements in the “Fact Sheet” are inaccurate and/or misleading:
A. The claim that the Mayor’s Plan adds 15,000 rounds for residents is incorrect. No new rounds are added to the resident pool. And in fact if the advance reservation system for residents is implemented the phone lottery will lose 12,620 rounds.
B. The assertion that “residents will enjoy 70% of the total tee times at Torrey is not a change from the current system which equally counts every round whether complete or not. The resident public has been asking that the 70-30% ratio be applied to finishable 18 hole rounds so that residents get their share of desirable tee times. The City has made numerous statements at public meetings appearing to accept the finishable round concept but is backsliding here. The proposed advance reservation system would exacerbate the problem with only those willing to pay an extra $100 per foursome able to get desirable times. The average daily public golfer will likely be left with only twilight times in the lottery.
C. The claim that the Torrey Clubhouse has been abandoned is belied by the fact that fee structure is designed to raise the money to pay for the clubhouse.
At tomorrow’s City Council meeting, SDMGA will present a five-point plan to cut through the misleading rhetoric and help craft a plan that would satisfy all financial needs of the system while keeping golf affordable and accessible to the average resident. Our five point plan is as follows:
1. Establish a “blended” rate structure combining SDMGA and City approaches:
Immediately implement the 2011 City Plan rate structure for non-residents - this fee structure will still be less than prevailing market rates.
Maintain the existing resident fee structure subject to annual increases not to exceed 4%
Maintain the senior discount rate and 10-play card subject to the same 4% per annum rate increase.
Maintain the current County resident rate subject to the same rate of increase.
Charge residents weekday rates on Fridays.
2. Require that the 70-30 resident-to-non-resident ratio apply explicitly to finishable 18 hole rounds and assure compliance by publishing daily tee sheets and a monthly audit of the ratio.
3. Implement the 90 day advance reservation system for non-residents only. Residents only should use the existing 7 day advance lottery system with no additional fees or exceptions.
4. Adjust the historic Men’s and Women’s Club play schedule to move some times rather than end them and extend a long-term agreement to insure continuity of play.
5. Insure that the Golf Enterprise Fund is the vehicle to collect and distribute money’s for operational use on the three courses and for agreed upon Capital Improvements only. The Enterprise fund should not be used to subsidize the general fund in the form of “rent” or any other means.
We look forward to working with you at tomorrow’s meeting.
Thank you.
Submitted on behalf of the 1353 members of the SDMGA,
John Beaver
Joe Burwell
Paul Spiegelman
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FOR IMMEDIATE RELEASE
June 23, 2006
FACT SHEET
SANDERS’ GOLF PLAN INCREASES PUBLIC
ACCESS, IMPROVES CITY GOLF COURSES
(WITH SDMGA COMMENTS)
5 YEAR GOLF PLAN SET TO GO BEFORE COUNCIL MONDAY
Mayor Sanders’ 5 Year Plan for the operations of the City’s golf courses will be considered by the City Council on Monday. Among the many other benefits, the Mayor’s plan:
• Greater Public Access and Equity:
Adds 15,000 additional rounds of golf for San Diego residents at Torrey Pines yearly.
SDMGA RESPONSE: This statement is inaccurate, misleading and incomplete. If the advance reservation system is fully implemented, the public lottery will actually lose 12,600 tee times, not add any. Although the “Fact Sheet” does not break down numbers, recent statements by the City show the erroneous basis of this statement. It includes some 19,350 rounds which were returned from the pro shop, Lodge and Hilton; all of these rounds went to non-residents under the old system, remain part of the non-resident 30%, and virtually all of them will go to the new non-resident lottery system. Only the Men’s and Women’s Club tee times go into the resident’s time pool and these are a transfer of tee times from some residents to other residents. This means there are no additional total tee times available to the public from this “return of rounds”. In fact, as discussed below, if the resident advanced reservation system were implemented, there would a loss of 19,320 rounds (12% of 161,000) to the daily public golf lottery. (if the 6,700 times taken from the Men’s and Women’s clubs are subtracted from this, this still leaves a loss of 12,680 rounds to the public lottery. Moreover, the allocation of these rounds to those with the ability to pay higher fees undermines the basic purpose of municipal golf courses – affordable golf to all – and promotes an inequitable distribution of tee times by wealth.
Residents will enjoy 70% of the total tee times at Torrey Pines versus 30% for visitors.
SDMGA RESPONSE: This is misleading. It is not a change from the current system which equally counts every round whether complete or not. The resident public has been asking that the 70-30% ratio be applied to finishable 18 hole rounds so that residents get their share of desirable tee times. The City made numerous statements accepting the finishable round concept but is backsliding here. The proposed advance reservation system would exacerbate the problem with only those willing to pay an extra $100 per foursome able to get desirable times. The average daily public golfer will likely be left with only twilight times in the lottery.
• Curbs Vested Interests: Cuts the preferential tee times given to vested interests such as hotels, clubs and brokers.
SDMGA RESPONSE: It is a good thing to cut or even do away with preferential tee times to those with vested PROFITEERING interests; specifically the hotels. They use preferential tee times purchased from the city to service wealthy clients for a profit. On the other-hand, the clubs are the citizen and resident municipal golfers of San Diego. They have no profit motive. The clubs simply organize competitive events and provide a means to help all residents interested in the game. They help provide a future reservoir for municipal golf course users. The cuts in club tee times provides little if any value to the available resident tee times because the advance reservation system will reduce the tee times available in the lottery by 19,350 rounds or a net loss of 12,650 rounds
• Improvements to All 3 Courses: The Mayor’s plan makes $36 million (through 2020) in necessary capital improvements at all three City golf courses. Visitors, not City residents, pay for these capital improvements.
SDMGA RESPONSE: We support the idea of visitors paying for the golf course capital improvements. We have provided a Revenue Comparison Analysis that shows that this can be done if the non-resident rate structure is close to market value such as using the 2011 rates starting in 2007. What our analysis also showed was that this can be accomplished while limiting the increase to resident rates at 4% also starting in 2007.
Why are capital improvements that go out to 2020 being discussed? This is just adds to the confusion of what’s going on with the Five-Year Plan. The capital improvements up to 2011 amount to $12,600,000 (not including Torrey clubhouse) and that is what should be talked about.
• Creates a New Reservation System: Residents will find it easier to book their tee times, including advance tee times. The money previously pocketed by brokers will now flow to the City.
SDMGA RESPONSE: We support the implementation of a new reservation system for non-residents only. We believe such a system would be better administered by marketing professionals and overseen by City staff. The advance reservation system fits well with the needs of tourists who need to plan in advance for their travel plans and it takes nothing from the resident golfer. On the other hand, the City’s proposed advance reservation system for residents takes away 19, 350rounds from the phone lottery system (see comments above). In addition, charging an additional fee undermines affordability for residents. The advance reservation system for residents would bias the tee time allocation process in favor of those who can afford the extra fee and provides them the option of dropping out of the lottery simply by paying $100 more per foursome. This is a benefit that only some citizens can afford. For this reason, SDMGA opposes the advance reservation system for locals. However there may be some benefit to making this opportunity available in a much more limited number, say 4% of total tee times. This is comparable to the tee time allocation proposed for the Men’s and Women’s Clubs.
• A Financially Responsible Plan: Green fees will be increased but only to cover costs; each course should be self-sustaining. Residents will only pay for the cost of a round of golf; visitor fees will be higher to also cover the improvements to the courses.
SDMGA RESPONSE: The Plan is not financially responsible because it fails to specify financial goals, fails to set revenue and expense targets and fails to adequately consider the critical goal of keeping golf affordable for residents. No plan can be called financially responsible that fails in these critical ways to meet the most basic of accounting principles.
SANDERS ON HILTON LAWSUIT:
The Mayor strongly believes that the issues raised in the lawsuit against the Hilton are completely, 100% unrelated to those addressed in the 5 Year Golf Plan. The Mayor believes that the lawsuit should proceed and that a court should rule on the issues raised by Mr. DeYoung. Mayor Sanders will not support a settlement that confuses the issues and perverts the tenets of his 5 Year Golf Plan, principally affording greater public access. The proposed settlement was negotiated without his knowledge or consent and he does NOT support it
MAYOR’S 5 YEAR PLAN OUTLINE
Tee Time Allocation:
• 70% Resident:
Daily public golfers – phone system and walk up (63% of total allocation)
Tournament Golfers – pre-booked through Staff (2%)
Golf Clubs (Men’s and Women’s each 2.09%)
SDMGA RESPONSE:
Daily resident golfer – phone system and walk up: The reality is that if the Advance Reservation System is initiated the daily time allocations available to the resident golfer will be cut by as much as 19,320 rounds which amounts to 12% of the total rounds so that only 51% will go to the phone system and walk ups.
• 30% Non-resident
• Resident Allocation Changes:
To increase play for all City residents, Men’s and Women’s Club play will be limited to two tournaments per month at Torrey Pines (at 70% rate reductions).
SDMGA RESPONSE: These reductions come at a substantial cost to tournament golf and the benefits that the clubs provide.
• In addition, supplemental tee time agreements with hotels were not renewed, and Club Corp. returned its times.
SDMGA RESPONSE: As discussed above, all of these rounds remain as part of the 30% non-resident allocation and are of no direct benefit to San Diego residents.
Result: 15,000 additional rounds at Torrey Pines
will be available to all City residents.
SDMGA RESPONSE: FALSE. The public lottery will lose a net of 12,620 tee times and the clubs will lose 6,700 more.
Greens Fees:
· Greens fees for residents will cover the costs of operating the course. Rates shall cover the costs for course maintenance and administration only.
SDMGA RESPONSE: Detailed and audited statements of costs have not been provided so there is no way evaluating what the costs referred to are. As far as revenues, we provided the City with a comprehensive analysis that shows there is no need to raise the greens fees to the levels stipulated in the Five-Year Plan. A modest 4% yearly resident fee increase combined with the immediate implementation of the City’s proposed 2011 rates in 2007 would yield substantially more revenue than the City Plan.
· Non-resident greens fees will cover maintenance, administration, debt, and all capital costs, and will continue to help subsidize residents’ greens fees.
SDMGA RESPONSE: A principal purpose of allowing non-resident golfers on to a municipal facility is to provide additional revenue. We fully support charging market rates to non-residents. This would allow a system that pays for all capital improvements and first class maintenance while keeping resident rates affordable. The City Plan does not go far enough in relying on market rates to non-residents to underwrite costs and improvements.
· The Plan maintains Discounted Greens Fees for Resident Seniors at All Golf Complexes.
o Resident Seniors will receive a 30% discount on all week day greens fees
SDMGA RESPONSE: We agree and applaud the discount rates advocated by the public after the city proposed raising them.
· Junior Rates: to grow the game of golf, resident junior rates for the monthly ticket will not increase during the life of the Mayor’s Five-Year Business Plan (current rates are $10.50 per month).
SDMGA RESPONSE: We agree and applaud the return to existing rates advocated by the public after the city proposed raising them.
Advance Reservation Process:
· Currently, brokers book advance tee times for golfers. This has resulted in many significant negative customer service issues and lost revenue to the City.
· The plan proposes to address this need as follows:
o The system will allow patrons to confirm an individual tee time up to 90 days prior to
play.
o All tee times will include a booking fee.
o Individual bookings will be limited to two tee times per week.
o Booking fees will cover administration costs and advertising.
o The proposed process will be administered by existing staff.
SDMGA RESPONSE: This is an unproven, experimental system. The City has not provided enough detail to assure that the advance reservation system can be adequately staffed and marketed. It could work well for non-residents simply because of necessity – visitors have a need to plan. The City has no experience in this area and it would do better to outsource task, under strict city guidelines, to let a qualified tee time broker do this job under contract.
We oppose the advance reservation system for residents; it would take away 19,320 rounds from the resident lottery pool. The built-in bias favoring those with the means to pay $100 more per foursome over most of the regular resident players is an unfair allocation of tee times, inconsistent with the basic purpose of a municipal golf course to make golf affordable and accessible to the resident golfer.
Priority Capital Improvements Projects:
The Mayor’s Plan includes over $36 million in improvements to all three City Golf Courses as
follows:
· Balboa Park (Total needs by 2020: $13,550,000)
o Clubhouse roof replacement - $100,000 FY 2007
o Irrigation system upgrade to the 18 hole course - $1,200,000 FY 2008
o New Clubhouse and parking lot upgrades - $8,500,000 FY 2011-2013
o
· Mission Bay (Total needs by 2020: $4,375,000)
o Upgrades to the existing restaurant – $400,000 FY 2007& FY 2008
o Irrigation system upgrades – $900,000 – FY 2007 &2009
o Driving Range Improvements - $1,000,000 FY 2009
· Torrey Pines (Total needs by 2020: $17,650,000)
o Parking lot expansion and upgrade – $5,000,000 – FY 2007
SDMGA RESPONSE: We support capital improvements which enhance the golf courses. We are not convinced that the amounts allocated to these items are appropriate. For example, $5,000,000 for a parking lot improvements at Torrey seems grossly excessive.
The Mayor’s Plan includes a long-term capital improvement program to preserve
and enhance all three City golf courses for future generations to enjoy.
SDMGA RESPONSE: We contend and the USGA agrees the value of golf is in the game and access and a well maintained course; it is not in the buildings. Let’s follow the advice of the USGA and keep our courses in immaculate condition rather than invest heavily in glitzy and unnecessary building projects.
Torrey Pines Country Club Clubhouse Project:
· The Mayor does not support the financing of a new clubhouse during this 5 year business plan. The Mayor does support parking lot improvements prior to the U.S. Open.
SDMGA RESPONSE: This statement and the City Plan are fundamentally misleading in that although they both contend that the Clubhouse has been dropped, the City is still raising the money to build the clubhouse. The $6,500,000 in construction costs should be removed from the CIP budget and no further funds should be expended on soft costs.
BACKGROUND
In June 2001, the City Council adopted the first five-year Business Plan governing the operation
of City-maintained golf facilities. The plan outlined key issues facing the daily operation of the
three City golf complexes. The plan also outlined key capital needs and established the green fee
structure for the five years covered by the plan. During the five years of the plan, several key
changes occurred in the Golf Division of the City’s Park and Recreation Department.
Some of these changes included:
· Torrey Pines Golf Course being selected for the 2008 U.S. Open
· The City assuming operational responsibility for the Mission Bay Golf Complex following
· the expiration of its 50-year lease
· Completion of a comprehensive audit at Torrey Pines resulting in updates and improvements
to inventory tracking, cash handling procedures and other operational and customer service
standards
During the preparation of the Mayor’s five-year business plan, Golf Operations staff has worked
with the Golf Advisory Council (GAC) to seek input on the formation of the plan. This input
from the GAC began in October 2005 with the formation of the business plan principles and has
continued monthly as the plan has evolved. In all, City staff met five times with the GAC to
discuss the principles and specifics of the proposed business plan.
Primary Goal of the Five-Year Business Plan: Open Golf Courses, More Access for
Residents
The primary goal of the Mayor’s plan is to provide a guideline for Golf Operations over the next
five years. During this time, the Golf Division will:
· Address the significant revenue shortfall at Balboa Park
· identify plans to address the maintenance deficiencies at all three facilities
· reduce the backlog of facility deferred maintenance
· provide funding for several much-needed capital improvement projects
In general, the plan must maintain a Golf Enterprise Fund that addresses many operational needs while establishing clear policies and procedures that ensure the long-term financial sustainability
of the fund.
SDMGA RESPONSE: The Golf Enterprise Fund has been running a surplus for years and the City has been draining off $1.7 million each year in “rent”; thus, municipal golf, in an incongruous manner, is subsidizing the City instead of putting the money into the courses. The focus on individual facilities or individual user groups is misdirected. It is the bottom line of the Golf Enterprise Fund that counts and SDMGA’s plan, like the City’s, generates $6 Million per year profit to be used where needed in all golf facilities. Other recreational facilities like tennis courts, dog parks, and softball fields do not pay rental fees. We do not believe that golfers should either.
City staff has worked with many City departments, as well as private consultants, regarding the development and review of the proposed business plan. This collaboration has added diversity of experience and knowledge to the process and has resulted in a plan that attempts to consider all of the many short- and long-term aspects of golf course management and operation. The Mayor’s plan addresses many of the existing system deficiencies and allows for the long-term enhancement of all three complexes.
SDMGA RESPONSE: The City Plan provides an outline of issues that need to be addressed. It has many strengths including its emphasis on the long-term health of the golf courses and the use of non-resident fees at market rates to support golf operations. It goes off course when it seeks to maximize revenues from residents violating the most basic purpose of a municipal golf course – affordable and accessible golf for all residents regardless of means. With the modifications suggested by SDMGA, the Five Year Plan can be improved so that it more adequately addresses the interests of residents. San Diego is presented with a unique opportunity to show the golfing world that we have the wisdom and maturity to run a world class golf complex that remains physically and financially accessible to our residents. Such a result would help to restore our reputation as “America’s Finest City.”
