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Phoenix Golf Enterprise Study, Ad-Hoc Committee Meetings and Recommendations January 23, 2013

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Presentation on theme: "Phoenix Golf Enterprise Study, Ad-Hoc Committee Meetings and Recommendations January 23, 2013"— Presentation transcript:

1 Phoenix Golf Enterprise Study, Ad-Hoc Committee Meetings and Recommendations January 23, 2013

2 2 2012 Golf Enterprise Study Financial impact of various options to address the ongoing Golf Enterprise Fund deficit Does not include an analysis of any social or quality of life issues or Papago Golf Course Aguila Golf Course

3 3 Golf Supply and Demand Phoenix Golf Average Rounds & Maricopa County Golf Courses

4 4 Saturated Valley Golf Market Golf Holes per 10,000 People by Metropolitan Statistical Area

5 5 Phoenix Golf Financial History Rounds began declining in early to mid 90s Phoenix Golf began running annual deficits in Fiscal Year 1998-99 Fiscal Year 2011-12 ended with an annual deficit of $2.4 million Cumulative deficit at $14.8 million as of 6/30/12

6 6 Phoenix Golf Financial History 2004 Refinanced Golf Fund debt to lower cost 2005Golf Staff Reductions 2007Refinanced Golf Fund debt to lower cost 2009Defeased (paid off) all outstanding golf fund debt 2009Outsourced Papago Golf Course 2012Comprehensive Golf Study

7 7 Operational Improvements Many efforts over the years to improve revenue, quality of play, and operational efficiency Representative examples: –Online booking of tee times –Volunteer assistants to improve pace of play –Driving range improvements at Encanto –Staff reductions that brought positions per hole 12% below national average

8 8 Study Conclusions Phoenix Golf has been operating more like other General Fund recreation activities such as softball or swimming pools. Larger market forces have prevented Phoenix Golf from being self sustaining The Phoenix area golf market, similar to the national golf market, has experienced declining rounds in response to the increase in golf courses over the last 20 years Even with aggressive efficiency and revenue enhancement efforts, Phoenix Golf will not be 100% cost recovery over the next 5 years

9 9 Cumulative Deficit If Phoenix Golf should continue operating like our other public recreation programs : No change$2.0 – 2.4 million Outsource grounds maintenance$1.4 million Close Palo Verde$1.2 million Close Maryvale and Palo Verde, convert Aguila to limited-use park $800,000 Close Maryvale and Palo Verde$600,000 Close Maryvale, Palo Verde, & Aguila$412,000 Annual Cost to 3PI or GF* * Does not include future major repair or infrastructure replacement costs.

10 10 Golf Ad-Hoc Committee Parks and Recreation Board appointed 11 person Ad-Hoc Committee Process lasted approximately three months and involved: –Five public hearings were held at locations near each city golf course –Two work-study sessions held Encanto Golf Course

11 11 Golf Ad-Hoc Committee Members NameAffiliation Mike Lieb, ChairParks and Recreation Board Member Cleve Lynch, Co-ChairCGAC Member Trish AlstonEncanto Ladies Club and Encanto resident Jesse BravoPalo Verde golfer and resident Jim CarlMaryvale Mens Club Mark GallegosLaveen resident Curt HudekExecutive Director of the SW Section- PGA Dave MaddoxCave Creek Mens Club Larry McLennanSave Papago Golf Jim MillerJohn F. Long Properties, Inc. Adreienne WilhoitResident and attorney

12 12 Public Outreach Golf Ad-Hoc Committee webpage created Direct emails to more than 65,000 addresses in database Post cards mailed to 5,000 households and businesses Meeting dates/schedule mailed to 95 HOAs Two public hearings recorded and posted on Committee webpage Hotline established during process Email link created for public comment

13 13 Participation More than 500 residents attended the five public hearings –86 spoke at hearings –123 provided public comment via email link –36 left voicemails on hotline Cave Creek Golf Course

14 14 Committee Recommendations 1.Keep all courses open 2.Eliminate Golf Enterprise Fund 3.Pay off cumulative $14.8M debt 4.Outsource course maintenance 5.Issue RFP to private sector to generate potential revenue through development 6.Expand food and beverage

15 15 Committee Recommendations, cont. 7.Create advisory board of golf professionals and community advocates 8.Expand marketing plan/create marketing budget 9.Prepare five-year business plan 10.Explore deed restrictions 11.Develop five-year capital plan

16 16 Recommended Action Plan 1.Revise 1982 Golf Enterprise Fund resolution 2.Pay down cumulative debt immediately 3.Issue RFPs for: I.Outsourcing maintenance II.Development opportunities III.New food and beverage concessionaire IV.Firm specializing in golf course operations and creation of five-year business and capital plan 4.Issue RFP for management/operation of Papago 5.Establish annual Phoenix Golf Summit 6.Develop golf course deed restrictions

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