HomeMy WebLinkAbout03-07-16 Special Elbel Committee MinutesOFFICE OF THE CITY CLERK
KAREEMAH FOWLER, CITY CLERK
Special Advisory Committee for Elbel (Golf Course) 26595 Auten Road South Bend IN 46628
March 7, 2016, 6:00 P.M.
Committee Members Present: Jo M. Broden, Randy Kelly, Karen White, Aaron
Perri, Dan Farrell
Other Council Present: Tim Scott, John Voorde
Others Present: Joseph Molnar, TJ Mannen, Ron O'Conner, Paul
Tipps, John Finneran, Aaron Perri, Cecil Eastman,
John Murphy, Sally Derengodski
Councilmember Jo M. Broden called the meeting to order and asked the various Committee
members and other experts present to state their names and titles. She announced agendas were
printed and available along with various financial documents at the front. Councilmember Jo M.
Broden stated the minutes of the February 291h meeting are still in draft form but they are
available for inspection and all recordings of the meetings will be available online through the
City Clerk's YouTube Page. She proceeded to recap the major points and discussions that were
brought forward at the previous committee meeting.
Councilmember Karen White acknowledged Council President Tim Scott and Councilmember
At -Large John Voorde were in attendance.
Councilmember Karen White briefly explained the agenda for the evening and asked John
Murphy to begin his financial presentation.
John Murphy, City Controller with offices on the 12th Floor of the County -City Building, gave a
presentation on the financials of Elbel Golf Course. The numbers were the same as presented at
the previous meeting but this time displayed in a more user friendly format. The ten year trend in
revenue over the past ten years is downwards from $781,829 in 2016 to $609,654 in 2015 at
Elbel. The trend in expenditures is down as well going from $774,829 in 2006 to 662,214 in
2015. The last year that Elbel operated on a profit was 2006. Revenue for the non - reverting fund
has gone down consistently with the rounds going down over the past ten (10) years as well
while capital expenditures bump around from year to year depending on what the course needs.
Two (2) big capital expenses over the past ten (10) years were the irrigation system in 2008 that
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cost $499,239 and the new golf carts in 2012 at $185,250. In 2015 capital spending was very
modest with $4,503 spent but that has been corrected with the special appropriation approved a
few weeks ago. One of the concerns of the City would be when is the next big capital investment
going to be made because those are the years where the City takes the biggest hits.
A percentage of expenditures for 2015, personnel was the largest at 47% (forty -seven percent) of
all expenditures with a total of $313,753. Shared administrative expenses, which is an allocation
of the golf course directors salary among the three (3) courses along with a city allocation to
cover items like payroll, accounts payable, and the administration and finance team which is
allocated to all departments of the city. For the upcoming year Elbel's administration fee would
be around $22,000. The administration gets split up between all the departments in the city so if
Elbel's was eliminated every other department would be a little more to make up for that.
Seventeen percent (17 %) of expenditures at Elbel last year were spent on contractual expenses.
T.J. Mannen stated contractual expenses include phones, Dish Network, utilities, subscriptions,
and other charges such as credit cards.
Mr. Murphy stated personnel expenditures have decreased over the past five (5) years. Cost of
goods sold has increased over the past five (5) years. Supplies and contractual expenses have
decreased and capital expenses bump around depending on the year.
John Finneran asked Mr. Murphy when the last time the price of a round of golf has gone up at
Elbel.
T.J. Mannen stated a fee increase was instituted in 2008 when the price structure was changed to
get rid of the resident and non - resident rates. The price structure is built with the assumption that
it should be more expensive to play at peak hours of usage and less expensive at the times of day
when the courses are used less. In 2012 the fees went up around one (1) dollar a round and in
2014 the increase was around three (3) dollars a round on the weekly fee.
Mr. Finneran stated if revenue seems to be the problem and expenses are going up then the price
per round should go up a bit.
Mr. Mannen stated it is important to be price sensitive to the competition so as not to price the
course out of the market.
Mr. Finneran asked who would be the main competition. Mr. Mannen responded Blackthorn,
Brookwood, Four Lakes, Warren, and some other courses. Every year there is a projection where
there is an analysis of where each course sits against the competition.
Mr. Finneran stated there probably should have been some increases in price earlier to offset
these deficits.
Ron O'Conner asked how much was in the non - reverting fund as of today.
Mr. Murphy responded around $400,000 for all Park activities. The golf course sub - account is
approximately $150,000.
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Mr. Perri stated more capital is spent on the golf courses from the non - reverting fund than they
bring in to the fund. He also stated ten (10) years was determined to be an appropriate time span
to catch the various life cycles of the various systems used on a golf course.
Council President Tim Scott asked what the numbers in the past have been to market and
advertise Elbel.
T.J. Mannen responded there are a lot of tradeoffs that are done with the local media companies
that do not factor into a number because they are treated as trades. The golf marketing budget has
not been very much on average around two (2) to five (5) thousand dollars.
Councilmember Karen White thanked Mr. Murphy for his presentation and turned the floor over
to Aaron Perri.
Committeemember Perri began with saying he has heard questions about what it would cost to
operate the course in 2016 and he wanted to provide that information. He was not entirely
comfortable with how the numbers were presented in the 2016 budget for a few reasons.
Committeemember Perri provided a spreadsheet with the updated projection numbers forecasted
for 2016 with the numbers broken down by course and by position, expenses, and other factors.
The spreadsheet is on file for public inspection in the City Clerk's Office as well as online in the
Elbel DropBox. This allows for everyone to see where every dollar is going to go.
Committeemember Perri expressed his belief that revenues were projected to be higher in 2016
than was possible, revenues had not been that high since 2006. The expenses were about right
but needed slight adjustments as well. The forecast presented is the best available budget to work
off going forward. Revenues were put inline with what the course did in 2015 but reduced Elbel
revenues by twenty (20) percent after looking at the booking pace so far. Hopefully with new
marketing strategies as well as all the press Elbel has received the hope is the course will do
better than these projections.
Committeemember Dan Farrell asked that since the three (3) courses have experienced a twenty
(20) percent decrease in revenue but only a five (5) percent decrease in cost, is that because there
are so many fixed costs regarding running a golf course.
T.J. Mannen responded yes because personnel is such a fixed expense.
Sally Derengoski stated that lowering the prices per round does not seem to be working. It seems
there needs to be a big push to look at pricing strategies for Elbel. It was her opinion that Elbel
should not be compared to the medium and lower courses because Elbel is actually positioned
much closer to Blackthorn in quality. This would give rational to raising the rates, not to
Blackthorn or Warren levels, but to an upper middle niche that is not utilized currently in the
area. She asked if it is too late for 2016 to look at those prices.
Committeemember Perri responded all the fees were approved by the Park Board back in
November but things can still be altered. If there is a year to raise prices it is certainly this year
when there is so much enthusiasm surrounding the course.
Sally Derengoski asked if the all- inclusive at $1399 would include Elbel.
T.J. Mannen responded no Elbel was taken out back in November and the price was lowered
because it went to two (2) courses instead of three (3). There will be season passes for each
course but going forward the all- inclusive will be for all three (3) courses. The projection is to
open as early as March 9' if the weather holds.
Sally Derengoski asked if the senior, junior, and e- passes are for all the courses.
T.J. Mannen responded the senior passes are course specific The a -pass is for all three (3) of the
courses. The junior pass, because the department wants to boost junior enrollment, is for all three
(3) courses.
Councilmember Randy Kelly asked that since Elbel is now going to be a part of the season pass
shouldn't the price rise.
T.J. Mannen responded yes that is the plan.
Dan Farrell commented that it looks like the majority of the revenue decreases came from the
daily green fees. The season tickets were down about three (3) percent a year while the daily fees
were around six (6) percent. It is probably a possibility to increase those season ticket holders
because they have remained steady.
Councilmember Jo M. Broden suggested that the $1,300 season pass should be given a payment
plan option so you don't have the put all the money up front all at once. That may be more
attractive especially to the seniors who have more of a fixed income on a monthly basis.
The Committee discussed the need to make the official recommendation that Elbel will open and
be run by the city for 2016 and will make a formal motion and vote at the end of the meeting.
T.J. Mannen presented the numbers regarding rounds played at the three (3) city owned golf
courses over the past ten (10) years. The numbers can be found online and on file in the City
Clerk's Office. Erskine has occasional spikes if the weather is good in December because they
leave Erskine open but close Elbel in December because Erskine is in the City limits and easier
to maintain in adverse weather. The overall trend has been downwards at Erskine and Elbel
while Studebaker has declined slightly less.
John Finneran asked about the big drops at Elbel from 2007 to 2008 and from 2013 to 2015.
T.J. Mannen responded a lot of that is associated with weather. In one year the courses lost
almost a hundred (100) days just to rain. The sport is dependent upon the weather.
Mr. Finneran asked on a good day how many rounds of golf will be played.
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T.J. responded anywhere from a hundred and twenty (120) to a hundred and fifty (150)
depending on the course. As is noticeable from 2011 to 2012 all three (3) courses went up and
that is almost certainly because of the weather.
Councilmember Jo M. Broden asked how often the courses are closed because it is raining and
how often are they closed after the rain because the greens are too soggy and not draining
properly.
T.J. responded at Erskine it is a bigger concern because of the layout surrounding the course.
Some days a really rainy day will take a course out for the next day as well because the course
can't be played. There are times one course is down but another one isn't because of where
storms hit the hardest.
Ron O'Conner asked how the revenue is allocated to each course when there is a season pass
person playing X amount of rounds.
T.J. responded the revenue is allocated based off of a percentage of season pass rounds played at
each course.
Ron O'Conner asked if there has ever been a plan to try and turn around these declining numbers
which are decreasing at all courses.
T.J. responded that a big problem he has seen is that nobody knew where the courses were.
Competition has a lot to do with it as people spread out their rounds not just at the municipal
courses but at the private courses in the area as well. He stated one of his goals obviously as the
new director of golf operations is to see these numbers turn around. The 2008 decline had to do a
lot with the recession.
Sally Derengoski stated nowhere has she seen the outings income for Elbel and asked what is the
philosophy for the two 18 (eighteen) hole courses and managing outings between them.
T.J. stated the outing fee is basically the same as the daily fee and are allocated in the data as
daily fee rounds. They try to always have communication between Elbel and Erskine so that both
courses are not closed on the same day because of outings. There is also the fear of having too
many outings because you want to be careful that season pass holders can come on the days they
want and golf and not be turned away because of an outing.
Dan Farrell commented that daily fee rounds at Elbel are actually steady or even up a bit from
2011 to 2015 but the revenue is down at the same time period about six (6) percent and the
seasonal pass rounds played are down considerably more but their revenue loss is less. It would
be interesting to figure out how those numbers add up because that is a bit stranger.
T.J. Mannen responded it might have to do with time of day. When the fees were changed, the
charges for dusk and dawn rates were changed significantly to boost those times more.
Councilmember Jo M. Broden asked if there are different prices for county and city residents
T.J. Mannen responded not at this time but there used to be.
Mr. Perri added that the Parks Department as a whole did away with that structure a few years
ago.
Mr. Mannen reported the issue with the city resident requirement in the past was you can live
outside of the city limits but still have a South Bend address. This caused a huge argument
because people would say they lived in South Bend but technically they didn't when we looked
the addresses up so then there is an argument with the customer before they have even paid.
Mr. O'Conner asked if it was common practice for municipal courses to have a one price fits all.
T.J. Mannen responded he didn't want to speak incorrectly but he believed Eberhart does still
have a resident rate.
Sally Derengoski stated in Valparaiso after dealing with consultants they did away with their city
and county rates.
Councilmember Jo M. Broden asked about High School Golf and Cross Country and other high
school sporting events that close the courses down for non -golf use and their impact on the
numbers.
Mr. Mannen responded in the past it has always been a reciprocation between the South Bend
Community School Corp and the Parks Department that they could use the golf course and there
was no monetary exchange. It does close down around five to six tee -times in the afternoon
depending on the event. It's not a lot of time, maybe six matches or races throughout the year
total.
Councilmember Jo M. Broden asked about the promotional events T.J. brought to the previous
meetings and if he could expand upon them in a bit more detail.
T.J. Mannen named a number of programs and activities that he hopes will generate more
revenue outside of just golf. The idea is to utilize some programs that are outside of golf but that
also do not shut down the golfers and make the courses more multi use. These could be adding a
bike trail, campfire golf which would add revenue at night when the courses are normally closed,
sledding or tubing in the winter, doing a movie night on the driving range, dinner at Erskine, nine
hole scrambles, Two -hole golf where people can go out and play the first two holes to see if they
like the sport without taking the tee - times, historical promotions on the golf courses, drive and
putting contests, and other opportunities. These are just new and different ideas outside of golf to
drive revenues. He stated his openness to any new idea for the courses.
The Committee discussed the staffing requirements of golf courses and how the three (3) city
courses are currently organized. There were comments that perhaps some efficiencies in staffing
could be accomplished at the courses.
Councilmember Jo M. Broden announced this would be the time for public input and comments.
S.J. Szabo, offices on Mishawaka Ave., asked if there is a graph of the week which shows
attendance for all three (3) courses and what is the busiest day of the week.
T.J. Mannen responded at Elbel the busiest days are Wednesday, Fridays, and Saturdays.
Mr. Szabo asked if the season pass would include all three (3) courses.
T.J. Mannen stated it wasn't planned that way but now it will include all three (3) of the city
courses again.
Mr. Szabo stated he agrees that streamlining the management is an excellent decision as a good
amount of money is being spent on personnel. He asked what exactly does a Golf Pro do.
T.J. Mannen responded a lot goes into it but essentially a golf pro is a certifified PGA
professional and certified to teach, handle everything at the course, and make sure all standards
are kept. This includes keeping the handicapping accurately, inviting leagues, and being a main
contact for the outings.
Mr. Szabo stated it sounds like a good job for an administrator because it is redundant to have
both a golf pro and a superintendent. It seems there is waste there.
Catherine Osborne, 517 River Ave South Bend, asked if the Committee ends up determining that
the course cannot be made profitable why would a private company would want to lease or buy
it. It is her hope that it can be profitable but if the capital expenditures are too high then
privatization would be risky as well. If the Committee does determine golf cannot go forward at
Elbel that doesn't mean the City has to sell the land. There are other options besides golf even
though that is a desired goal. She invited the various committee members to a party in the house
built by Richard Elbel at 806 Leeland Ave on Saturday March 12th and 1:30 p.m.
Marsha Kizer, Ambia Ct. Mishawaka, stated if Elbel is no longer a city course then people who
have season passes could not go from Erskine to Elbel when they are full or when they have
outings. A city the size of South Bend needs two eighteen (18) hole municipal golf courses. She
noted from 2011 to 2014 that senior rounds increased significantly and everyone knows that
2015 was a special year because the course was in bad shape. She does not believe any of the
seniors who have season passes would back away if the fees were increased slightly. She
recommended changing 120 on the 201h" to ,$25 on the 25th ,,. She noted many private clubs are
going downhill but municipal courses are up thirty (30) percent since 1990. She expressed her
thanks for allowing this input and discussion to take place on Elbel and thanked Elbel for
Everyone for bringing such attention to this course.
Bill Wates, South Bend, stated there should be a mandatory golf court usage from 6:00 a.m. and
noon on the weekends to drive more revenue and move people through the course faster because
it is a prime Tee -Time. He was interested in the twenty -five (25) percent of out of county players
because many people closer to Chicago will drive out to Elbel because it is a bargain rate
compared to the courses closer to Chicago. The City administration needs to let T.J. come up
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with and use those great ideas he mentioned earlier because he is the guy who can turn this
around.
Chris Cobb, 215 E. Pokagon St., expressed his gratitude that these meetings are continuing and
that he is learning a lot about the golf industry. He stated it might be interesting to see how many
out of state golfers come to Elbel and if it would be financially beneficial to have an Indiana and
out of State rate because it is so close to the state line. Looking ahead it seems the number of
season passes being sold have not gone down too much but the number of season pass rounds
played has decreased significantly. He asked does that mean people are paying fewer rounds per
pass and does that effect funding for the individual courses. He also suggested looking into if at
any time these courses are at capacity and if there is a way to direct people turned away to the
other courses.
Don Cottons, 60189 Fellows St. South Bend, stated he has been playing Elbel since they built it.
There is a need for Golf Pros at each course and with the Olympics having golf this year it was
his belief golf participation will increase across the U.S. Raising the prices is not what the City
needs to do, rather there needs to be more attention on bringing people out to the courses Erskine
as well. It was his opinion that getting new tees at Erskine such as women's and senior's tees
would help make the game more accessible and fun. If people cannot reach the greens then they
don't want to play.
Kirby Whitacre, Director of Athletics at SBCSC, obviously Elbel is important to the South Bend
Schools and the students. He provided a letter from the Washington High School Golf Coach
which is now on record and available at the City Clerk's Office. He believed T.J.'s ideas were
great out of the box thinking and can provide the needed revenue for Elbel and the Parks
Department. Maybe the long -term solution is there needs to be more golfers in the community
and there should be marketing done towards kids. Golf is the only sport that does not have a pee-
wee program.
Jesse Davis, P.O. Box 10205 South Bend, profitability should not be the only determination
regarding Elbel, this is a quality of life issue as well. If the City wants to look at money spent
look at the millions that Smart Streets has cost or the millions that people want to put into the
zoo and other pet projects. Mr. Davis stated he never has golfed in his life but he has gone to
Elbel on numerous occasions and there shouldn't be fees for bike trails or walking trails. There is
still a $700 million dollar sewer project coming up so stop spending money on pet projects and
that has to do with the priorities of this city. These parks are great assets to this city.
Evelyn Emrich, Crumstown Highway South Bend, suggested adding an RV area at Elbel so it
would attract outsiders from around the country. This would utilize the clubhouse and the other
assets in the park. There needs to be programs where the whole family can come to Elbel while
dad plays golf. Do picnics or other activities for the kids to bring the entire family out and bring
revenues in. There also needs to be paved trails for senior citizens at Elbel.
Michelle Worth, 1785 Kessler Blvd South Bend, was curious about the numbers of how many
people use Elbel not as a golf course but just as a park. There are many people who use it for
cross country skiing, hiking, bird watching and other non -golf activities that cannot be
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quantified. Maybe Elbel is losing a lot less than other parks that have no revenue income because
there is the financial benefit of golf. Michelle Worth commented on reports that a couple years
ago a bunch of the woods around Mud Lake were thinned and trees were taken down and the tree
nursery as well was defrosted and where are the costs of that allocated.
Committeemember Perri responded the tree nursery is designed to raise trees in a stable
environment and then when they reach a certain age the Parks Department moves them to parks
around the city. That is a continuous cycle where the City keeps about $70,000 worth of tree
inventory there at a given time. There were trees removed from Elbel Golf Course in 2012 and
2013 and some of them were diseased and dying and others were done strategically to enhance
play at the course.
Michelle Worth stated what she heard was just the trees were cut down and were stacked on the
side of the road.
Committeemember Perri responded that doesn't sound right but he would need more
information.
Jeff Botich, Granger, asked if a season pass is sold at Erskine does the money stay at Erskine
T.J. Mannen responded no it all goes into a pool of season pass money that then gets allocated to
the courses based on the rounds done at each course by season pass holders.
Mr. Botich thanked T.J. for the answer. He asked why they have not had an open house at Elbel
which would help build visibility of the course. He stated he buys the all- inclusive pass and will
continue to do so as long as Elbel is a public course. If Elbel is sold he stated his group of
twenty -five (25) guys will not go play at another city course. It's not that Erskine is bad it's just
every course has their own group of people and his group is the early morning group at Elbel.
Elbel belongs to those golfers who have been coming year after year not to South Bend. Mr.
Botich asked if the superintendent house is provided to the superintendent who works at Elbel.
T.J. Mannen responded no the house is currently vacant and not used by anyone. In the past the
superintendent at Elbel made less money than the superintendent at Erskine because a house was
provided to them. Now the structure is not used for anyone.
There were comments from the Committee that the property should be used for something now
to bring in revenue.
Kieth Carol, Fox Run South Bend, plays golf at Elbel regularly. It was his opinion that the city
has the right management right now to turn municipal golf around in South Bend and they should
be given a chance. Aaron Perri is an excellent organizer and will do a phenomenal job. T.J.
Mannen as Director of Golf is an excellent choice. Mr. Carol stated T.J. is the main reason his
group of guys goes to Elbel so regularly and he is the best golf pro in the area. No other course
around the area will treat golfers as well as T.J. treats them. With both of those gentleman in
their positions they will turn those numbers around which really aren't that bad to begin with.
Two dollars a round can easily be made up.
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Councilmember Karen White thanked the public and experts for coming out and providing their
knowledge and comments to this ongoing discussion. There will be a list of all the questions and
answers that will be placed online as soon as possible. Going forward for 2016 there has been
some questions regarding the state of Elbel in the near term and this committee wanted to clear
up any misconceptions.
Committeemember Aaron Perri suggested the first recommendation to come he hopes is that the
City does operate and open the course for this year. There really is no other realistic option. He
thanked the public for their positive comments for him and T.J. and their abilities to make this a
successful year.
Councilmember Randy Kelly made a motion to make a formal recommendation by the
Committee that the City opens and operates Elbel Golf Course for 2016. Committee member
Dan Farrell seconded the motion which carried by a voice vote of five (5) ayes.
Councilmember Randy Kelly made a motion that this Committee recommends the Parks Board
and Park Department look at golf rates across the board with the hopes of getting season pass
rates back to where they were last year. Committee member Dan Farrell seconded the motion
which carried by a voice vote of five (5) ayes.
Councilmember Karen White announced the next meeting of the Committee will be March 21St
and she encouraged the public to go to the Common Council website and view the DropBox
folder which has a tremendous amount of information and data regarding Elbel and the Parks
Department.
Committeemember Aaron Perri stated moving forward at the next meeting he wanted to note that
he hopes this committee looks farther into the future and maybe recommends an expanded study
of city run golf because pricing strategies do need to be revaluated at all three (3) courses not just
Elbel. He also hopes the committee looks into using this discussion as a pivot point for golf in
South Bend and also the environmental side. He expressed his support for an expanded inventory
in the environmental resources at Elbel which may be a yearlong process. His final suggestion
was that a natural resource management plan be implemented for the major parks in the City
which would guide all of our actions going forward with parks.
With no more business before the committee, Councilmember Jo M. Broden adjourned the
meeting at 8:13 p.m.
Respectfully Submitted,
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Randy Kelly, Chairperson, PARC Committee
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