and in the in that context what our investment strategy and approach is what are some of the long term trends in terms of our earnings and interest rates and then something you probably haven't seen before but it compares into some benchmarks and then we'll finally complete with the quick review of the performance and activity for the quarter so economic factors there are a lot of good things a lot of positive signs the economy yet we're still seeing that interest rates are low and consumer confidence isn't quite where it needs to be interest rates are expected to continue to be  low for the foreseeable future you would expect that with all these great things going on with consumer spending will be a lot better and consumer confidence be strong but it's quite not it's just not there yet there's some concerns over what's going on in europe they're going through deflation essentially and they're in there interest rates are even lower than ours and then the impacts that decline oil prices on down over here in us but the global economies are raising concerns apparently and what's been happening in is least in terms of what we're seeing from an investing perspective is that there's been a significant shift from the equities stock market to us treasuries and this is what they refer to as a flight to quality when there's always a concern about the equities people go to what's safe which are treasuries which means that the prices of the treasury go up and the yields go then conversely down so we're just we've been seeing that in the last couple of months so they still remain accepting a low in fact today's dates as of january twenty twenty six or th or actually lower than they were back in december so we're still seeing some declines in the yields and as i said the forecast when the federal reserve is that the low yields will continue into the near future so what we do with this our approach is what is referred to in the industry as sly safety first it is first and then liquidity and then yield so we never are never a primary focus is never on yields that's the third priority for us so we always just buy into the market whether the interest rates are low or high we don't try or project what interest rates going to do and make investment decisions on that whatever the market is we buy into that we have a five year window and during which we invest it that's that's per investment policy so we can't go beyond five years unless counsel specifically we're basically investing in over a five year period and we're basically filling gaps we want to make sure buying into the market whatever the yields are but over a five year period on a fairly even basis we don't want to be too heavy in any one year because if sorry left liquidity during that five year period pay all of our bills so we're not trying to go again too heavy in any one period of time we spread over a five year period and just buy into the market so these are the yields this is a four year trend of the key rates so in the lighter blue is the city's portfolio yield and you can see in two thousand and eleven the same quarter it was one point six seven it went down to one point four three and twelve and it's continuing to go down so to one point one point two six and then just more recently if i can just so you see one point one seven so the trend is still down on the yields we think it's going to flatten out we think that we're kind of the bottom but we're not sure there there are some concerns that they can go even lower which sounds impossible but it's there there are some concerns about that so we won't see that turning around for a while we're going to be investing this market and we're investing in one two three four year paper so whenever interest rates do turn around it'll be awhile before those investments but sure we can start investing in a higher interest rate so we're gonna see low interest rates and our yields and our investments and interest earnings as well for some time and then just the other other sort of key rates you could see there is the two year treasure which is a common  benchmark it's been pretty flat for the last of several years it has bumped up a little bit but it's just we think it's a temporary blip this is i think it's pretty it pretty amazing this goes all the way back to two fisker two thousand the blue line represents what our actual earnings were in in that year and then the red line represents what our yields are so the blue line relates to the left the red to the right you c back up but we are now down to two million citywide in terms of interest earnings that's just how dramatic this is and it's these are historical low rates you can see similarly the interest at the yield in our portfolio has been gone down and went up again after the recession of two thousand and one and but then tanked since the most recent recession and we're still very very low so again this is we're gonna see this for the next few years until interest rates make a big change and a permanent change and we can start investing in that environment this is a comparison with the benchmark so we you know one of the things we've shown this to you but not in the sense in the sense of context of a benchmark what this tells you and should tell you as a committee member  can see the blue is our portfolio rate so that's this line here the red is a treasury and then lafe what that's short term liquidity we should be following and tracking these trends and we should be just slightly above in terms of what we're earning because we do invest longer than a two year treasury you go beyond two years at times we also buy corporates that give us a little more yield but we shouldn't be too far apart from that if you see our portfolio yield being substantially higher than those other benchmarks that would suggest to you that we are to being too aggressive with our investments we're taking to mean your risk or either poor quality investments are just risky investments you should see us pretty close to this in fact we probably should ten trent pretty closely to the five year treasury which we do there's a little bit of lag because there's always a time period between us investing and when the rates changed but we should be really close to this and you can see we are we're almost trending exactly just other than the timing difference so again if you saw us anything above that or materially below that you should it should raise questions your mind that why are we these are too conservative or too aggressive mister samari oh how far above or how far below i think we should be try and i was just having this conversation with somebody else yesterday but i think we should be tracking pretty closer to the five year treasury it's we don't buy a lot of just straight treasury we bite what are called agency securities we have a look which gives us a little premium we also invest in corporate securities we also in this longer or at least up to five years so on average with all those factors we should be pretty close to the five year treasury and and we are any questions on that does that make sense so in terms of how he did this past quarter as i mentioned their portfolio yield is actually slightly down from the previous quarter just slightly from one point one seven nine twenty one point seven three  i'm hoping one of these days they'll start to climb up we're still kind of a trending downward the portfolio interest earned during the quarter citywide was for two and fifty seven for the quarter and the general funds portion to that was one hundred thirty three thousand the activity during the quarter we had nine million dollars in purchases we had twelve million dollars in collar bells and i'll go back to that in a second and then we had about two million dollars of mature in maturity and we also had the airport pay off a portion of their promis totally one hundred thirty six thousand so the net activity was a decrease in our investment portfolio which just goes into our bank account of five million dollars the cult securities above those are investments that we purchased that could be a three or four or five years security but they they contained a call protection so the issuer is able to to call those earlier than what is stated on the term just in case interest rates turn against them they can call them but for that they pay us a little bit more interest or more you so we buy those recognizing they're likely going to call them but we pick up a little few basis points rather than just going to either lay for something probably a couple determine security this these are investments as of december st the first row is what we have with union bank that's just money and we have in a checking account and you may recall that our current contract that gives us some ernie's credit for that so it reduces our costs our banking costs we have twenty four million dollars in life we have nine million in cds ten million in treasure securities and then what i mentioned earlier the federal agency securities we have most of our money almost ninety million dollars and then corporate medium term notes to a million and then you can see the promissory note we have with the airport of about five point two and it diminishes it diminishes every year our total cash on investments one hundred and sixty eight point three million dollars this gives you kind of a three or four year look on both our portfolio and yield so our cash balance has been pretty stable over the last four years our investment income has these continues to go down and this is just for the quarter the investment income and you see the portfolio yield correspond only going down so that's concludes my report in the action we're looking for today is to recommend counsels acceptance and approval of the fourth quarter and it should see second quarter investment port and then includes the fiscal agent report okay any questions or comments from committee members principal on hand and that would be a question i guess is how would this compare to the amounts of money that is is is there to earn this good question i don't know exactly but my guess is that the amount of money we had to invest back in two thousand as look is less than what we have today so that you know makes it more dramatic when you think about how much we were earning back then and and that might be helpful just for folks to see that just that we actually ha been accumulating a bit of money in our reserves and section and so that's one piece and the other one is that the good news about all this is that the dollar is the flight to quality is to a strong dollar and at least what we have here is is a strong currency and is able to have a lot of purchasing power in many things it still doesn't seem to get our streets paved but in any case i think it's that's that's one of the reasons for all these little interstates and there are i think there are two there at least one country if not two where the government rates of return are negative it's true i believe it's denmark or something that's that's actually gone negative so us is still a good deal from an investment perspective foreign investment because the rates at one percent are better than negative it's true in that case i would entertain a motion  recommendation okay thank you thank you all those in favor hi okay next item does the long range forecast look like i've been talking about minus three flat one percent growth however we've seen a real decline in the first six months of the year which we can attribute we think to drought impacts and also increased competition in the competitive market as other golf courses are experienced similar challenges and also we had a fantastic november in december in two thousand and thirteen from a weather standpoint where we didn't see the rain come the flip side of that of course it doesn't help the drought but we lose about four to five thousand dollars per day that we have rained on the golf course and so with a few rain events this year which we didn't have last year that exacerbates the issue and so what we fiscal year saw a real decline in play in footing in consequence to someone that drought measures that we were putting in place we were really reducing the amount of water on the golf course and perhaps could be accused of going a little too far and i don't think the community at that time with other golf courses being quite green still were accepting of that and were able to play elsewhere whereas a lot greener and so we've we've took the to the assumption that we feel that we won't lose that level of play and that cost us about thirty thousand dollars loan which currently the principal is not being paid down on the interest only which once the cop were paid off the plan would be to then pay off the principal and then the final part of that is the fleet where there's a two hundred and twenty three thousand dollars balance which is being paid off okay annual cash flow would be from a point of view of flatts growth from the projection where we're going to end this year a three percent decline or one percent growth okay so no real change in terms of the order of magnitude to the but about the status quo here's what it would look like if we were to refinance the debt over twenty years at a three percent interest rate okay so you can see on an annual basis reducing our cash outflows by having a lower payment would benefit the golf course but would still on a three percent decline and on every year with exception of one on a flat growth require the golf are projecting that we're going to end the year at two hundred and sixteen thousand dollars we started the year at two hundred and seventy six thousand dollars so we think we're going to dip into sixty thousand dollars of reserves in fy and therefore playing out those scenarios you can see that with a three percent and we also look to work with local partners with regards to hotel deals and and other things like that chambers of commerce the marketing plan is a joint effort from staff ideas meetings of concessionaires our golf advisory committee offer many ideas of course they play many other golf courses and are able to see what other golf courses are offering as we check as well and see what the market is doing one of the questions that came up at a fair question when we presented to council was the level of investment the golf course its marketing and comparing that to the industry so the industry standard of three percent of greens fee revenue would equate to around fifty thousand dollars maybe a little bit more on a typical year for how a golf course and over the last ten years i looked back at how much the golf course has been spending on marketing averaged around one percent so you could spare to say that the investment in marketing has been below what the industry has been doing and so what we're looking to do as i said earlier in terms of the projection is we're looking to rectify that and we want to increase our spend on marketing in fy fifteen between now and the end of the year to spend twenty six thousand dollars on the right things not just going to throw money anything but of course we want to make sure that we're spending on the right things and we're going to be coming back with our budget to propose an increase of  marketing to fifty thousand dollars or there abouts to bring us in line with where the industry is and the assumption that we're making with our marketing spend is not all of its going to necessarily yield straightaway but anything that we spend we expect to come back in rounds and revenue going forward ok so what does that really mean well for a number of weeks now i've been engaging insert to try and find a company who can help us to put a plan together to use their experience and we've been working with  this will then determine our plans for where do we want to spend our money in the next six months and ongoing we are expecting that actually some of the things are going to be happening quickly and a lot of the other things will take a little bit longer to s months a contract is now winging its way back and forth with some final adjustments ready to be signed whereby we will dramatically improve the interface our consumers and golfers and anyone interested in the golf course will have with regards third part of the of the request from counsel with regards to the maintenance clearly it's a major cost area for us fifty percent of our operating costs each year our labor and then we have supplies services water and equipment water last year was about twenty two hundred and twenty five thousand dollars and then you have the debt service in as the other two main areas of costs so if we looked at the debt servicing that might help us and then it's about what can we do with our maintenance costs so we have been taking reductions over the last five years and that's been with regards to reducing the funded positions permanent positions that's with regards to looking opportunities as retirements and things like that happen about can they be replace with hourly and it's also about unfortunately sometimes deciding not to do certain maintenance projects because we don't have the funding and that clearly isn't a strategy that can last forever it's okay to do in the short term but these things don't go away so we feel as if there's a limited opportunity for additional savings as it stands without really impacting on the quality of the product to our golf course to our golfers we have a small workforce it's seven days a week operation some of the guys start at three o'clock in the morning you know these people are there they're extremely skilled they do a great job and if they make a mistake it can be quite you know quite a detriment to the golf course if one of them does something to agreeing for example it might take weeks months to repair so we trust and rely heavily our staff and they do a very good job with regards to the opportunity to convert more positions as they were to arrive through retirements for example into hourly we're a little bit hamstrung in terms of policy for the one  hourly employees can work the increasing headcount makes the management tasks a lot more difficult to control in terms of you know more people to try and look after the span of control and ultimately for the types of people that we would need to have at the golf course there's skill level typically they would be looking for a full time job which we could give them for six months but then unfortunately would have to have to leave so it creates a real burden on management to try and maintain a crew that's adequately trained motivated and cares for the long term of the course so like i say we evaluate that case by case as opportunities arise and then finally we feel there's a limited opportunity for additional contracting and important word there is additional we do currently contract out a number of services that our staff aren't doing so for example tree work would be a good example we contract our tree work we've recently upgraded a number of tea boxes as part of the player improvement fund which was project managed by staff but ultimately undertaken by professional bodies who can come out with all the right equipment and all the right materials so whilst most of the day to day maintenance  undertaken by the maintenance city crew there are a number of tasks which come up which are outsourced to be able to keep that continuity of maintenance with our crews so in summary unfortunately rounds and revenues down at mid year and speak to some of our more pessimistic projections when we review before around where it might go refinancing the debt does improve the short term outlook but it doesn't necessarily resolve the long term outlook as i showed you on the previous slides of the reds and the greens it can help us in in some of the earlier years to to pay our bills but it doesn't necessarily impacting on the quality of the course so that all being said none of us really know exactly where the golf trend is going to go the industry has in the past been optimistic and stated one to  growths yet when they've had hindsight and looked at five years later hasn't quite always turned out in that way so that's clearly unknown and can make a difference to the numbers as you project them forward we think the revenue rounds will grow with improved marketing we have our current concession agreements which come to an end in june two thousand and sixteen that if we were to go out and maintain the status quo would likely commit the gulf fund to two thousand and twenty one on a five year t on the status quo model if we don't see the financial picture improved then the exposure to the general fund is between sixty and half a million dollars per year depending on which model you want to look out for anticipated gro decline and one thing to say you know maintenance could be revisited under a separate contract anytime however it's fair to say that right now we have eleven full time funded positions at the golf course of which by the time the contracts finalized in june two thousand and sixteen eight of those eleven will be eligible for retirement and of course if the decision were delayed or taken in future the likelihood of that number being eight would be different and therefore discussions of finding roles in general fund programs etc might well be more people so that the timing is important within that regard as to how the contracts end in two thousand and sixteen and then the commitment for the further five years in th piece so the what we're asking for you today then is to provide a recommendation to the council on the options to improve the long term financial sustainability of the municipal golf course and i thank you for your time  you mark first any questions from the committee white thank you for your report so there are eleven full time staffers doing the maintenance now in the pool of parks department staffers how many what's the what's the how many comparable skill work level folks are there in the park department would there be in ballpark numbers if it's  committee member white and finance committee members there are some comparables and and others not we do have an irrigation specialist at the golf course and we have that position at parks and they do similar work the park staff by and large have far more emphasis and working knowledge of horticulture than the golf maintenance staff would their area of expertise is golf course turf and so that that is a pretty significant difference although the titles of their positions are grounds maintenance worker one and grounds maintenance worker two and a senior grounds maintenance worker but the scope of what they do on a daily basis is different however if we were going to make room we would be looking at those similar positions in the parks division in the in public works at the airport at the waterfront and so similar to when we went through the recession people might be doing something different but they would still have a job exactly so and i would having gone through that process marc and i were just talking about that earlier today you know it's a very creative process when you're trying to find people places for people to land that does allow them to stay employed and to be in an appropriate job for what they bring to the job in terms of skills and knowledge so i don't know if that really i didn't get a number what what would be the how many folks again i've asked you to i'm not asking for down to the person but are there any other in the organization are there a hundred other in the organization kind of thing within the organization i don't know i'd have to research that and i respect that answer a lot i really do but i you know actually it's something that i could get from hr and i could follow up with an email because i think it's pretty straightforward great okay okay any public comment on this topic please make your way to the lectern here and please inform us of your name for the record and if you can keep your comments to two minutes we'd appreciate it thank you i will do so mister chair and members of the committee  as the chairman of the parks and recreation commission and i've also for the last several years on and off served as the liaison to the golf advisory committee and at our november two thousand and fourteen regular meeting the parks and rec commission heard a report from staff on the status of the golf course including the trends financial productions and options the city might consider to improve the financial outlook for the continued operation of the golf course the report was very similar to the full report that city council received in december but without exception commissioners emphasize three points that i'd like to bring up number one that this resource and asset should be kept available to the public and i don't believe that any of you dispute that number two that irrespective of the solution eventually accepted by city council it should be a financially viable sustainable model that protects this asset for our present and future generations particularly in light of the impressive growth in the youth participation at the golf course which we've experienced over the last five and three finally that the solution selected should be one where the city retains a majority of control in order to respond to local conditions and industry trends to help foster youth senior and women's programs and play at the course and to better market our course to the golfing public so in summary the commission hopes that the finance committee's recommendation will be a sustainable solution a solution that's a long term win and for this important public asset and the people that enjoy it and after all i think that a solution that benefits our golf course will also benefit the city long term thank you thank you mister chair many members my name is dominic namland i am representing the golf advisory committee which i've been a member for probably seven or eight years now and i've been the chair for the last few years i just wanted to come in and just reiterate some of the things that you've already heard and most importantly to me is you know the diversity of the golf course is so important to the community and myself it's a unique resource it's a valuable resource and it's worthy of the support of the city and the tax payers and and the department of finance or finance committee the solutions that i've been outlined i think are viable i think the golf course is worth it and you know refinancing it for all the you know the extension of the debt and things like that i think it's something that from a long term perspective is something that we can sustain i think re looking at and playing out the scenario with looking at the maintenance contract and seeing if we can outsource that i think is a viable solution as far as looking into it and putting that back on the table to play that scenario out and i would just urge you to support those those types of initiatives and i appreciate it thank you good afternoon my name is bryant my name is brian henson i'm also on the gac and i'm a marshal of for ten years and i addressed this committee before and i just want to offer a couple other opinions there is no business that can operate in perpetuity without occasional reinvestment upgrade or improvement and especially one that is it was intended to be a break even operation any business would fail with that formula or plan not investing money a five hundred thousand dollars investment as far as a debt forgiveness as opposed to refinancing would completely eliminate all of the issues of repayment from the golf course and it's similar in in cost to the co p payments that would be put on to the general fund from the if it were to be refinanced anyway so either way five hundred thousand seems to solve the issue for the next five years and going forward we only need to make it to seven years for the that other loan of the building so i would please i would urge you to please consider the impact of the piff as well are the players improvement fund as it will have as akin to marketing as we invest more things projects into the golf course it will it will create play at the golf course because you know you're going to market things but the actual improvement to the golf course is what it's going to increase and increase the play and your decision today should help community thrive and not t hello members of the finance committee my name is cynthia joanna i represent seiu local six hundred and twenty and the members of our maintenance staffs who are performing at the at the golf course now we are opposed to contracting out as we do not believe that it is viable and would urge the other proposals that have been recommended by staff including refinancing better marketing improved improving the interface and bringing up those revenues of all the reasons that have been given for the revenue going down maintenance quality at the course has never been one of them so there is a concern that that would be looked to as the first lin to reduce costs have as the report of the golf course expert who turned it in turned in their full report on this issue states he estimates that it would be over a million dollars to contract out the maintenance work the current and his report for some reason says that the actual right now is one million three hundred and sixty nine i'm not sure where that number came from because all the other numbers we've been given are just a little bit over one million and the actual costs on the maintenance staff is maybe nine hundred and fifty nine hundred something like that so if the current staff is costing nine hundred and fifty and the expert is proposing that contracting out would be over a million i don't see that as a source of  savings and i don't think you would either so staff has also pointed out the skilled workers who are there are skilled trained reliable they're doing a good job there we we are expressing concern with replacing full time trained persons who know that course and are doing an excellent job with either an outside contract person concern with relocating these employees it has not been made clear to us that there is anywhere for them to land they have a special expertise on what they do they're doing a good job and we urge the finance committee to recommend the refinancing the better marketing and any other cost savings that might be available to them without  destroying the team that is there and the good job that they're doing thank you thank  you good afternoon i'm john craig i'm currently the chairperson for the players improvement fund and actually last night at our meeting we finalized our board members and we're going to continue to invest in the product that we have and hopefully we're going to encourage more golfers to come out and that's going to try to alleviate the problem the other thing i'd like to say is that our main competitor glen annie they're now under the management contracts of touchstone but they're under the umbrella of capital crossing servicing company and they're a huge conglomerate that buys up properties all over the country not so much in the west coast but they they bought up glen annie and the last i don't know where there's a last council meeting but anyway their their investment proposals are to make zoning changes and then go in and develop around the golf course well goleta council shut them down so now that chunk of property has been losing money all this time so i understand that they just had an offer  that fell through so and since that is our main competitor i think it's wise for us just to let the status quo go maybe for a year or two to find out what's going to happen to the glen annie golf course thank you  montee and i work with the junior programs at the course i'm in favor of just a growth model for this after your hearing like for instance on the refinancing we can save some money there we're only doing one percent so far on marketing so if we save some money on the refinancing we put it a little bit more into like a three percent marketing here's the good news about the course we've got some tee times open i mean way back when in the s when things were just roaring along you couldn't get a tee time at this golf course or any golf course a revenue problem then not much you could do with it you couldn't grow it of course would already be full we've got some room now to grow we've got baby boomers and ready to retire i'm sort of on the tail end of that huh we've got the kids that are come along every year we see more growth more kids more kids another thing i like about that as i start to think a little bit about what about families the kids play golf and i know when people are working mom works dad works it's a little difficult maybe a little bit more of a push towards family programs at the course the really cool thing is no other course has the amount of junior programs that this has you think about it now twin lakes is a par three course they have a first tee but we have a complete eighteen hole golf course all right right now the first tee programs are going into the schools i have what's called the national schools program so for the first time kids are getting pe courses where they're getting acclimated to not just soccer not just football not just baseball but golf as well and we're starting to see an impact with that we're starting to see more kids come in look at the program and say hey you know what this looks like fun i did this at school i need to go to a place and try it out don't guess where they come and most of it marketing website that's in a better website you bet  i put together about five years ago that's where i get most of these kids most of the contact emails they come right through the youth golf website so different types of marketing like that different types of growth and we only need what like one percent or so just to start to get solvent again i think that's w reach anyways i'm energized about it i'd like to do something into that particular model and like miss rapp said if you try to reorganize just the employees it could hurt the course it might mean we don't have quite as good maintenance because alone and the crew out there they do a magnificent job i played a lot of golf courses this course has kept up extremely well and that's a big big big benefit i wouldn't want to gamble making a change on that besides when you think about it we shift some employees around and maybe i'm not right about this correct me if i'm wrong but doesn't that just put the burden of these payments because they're still gonna have their job just to make their salaries on some other a city sponsored project in other words there's a net it isn't going to save the city of santa barbara anything it's just going to make it a golf course look better for stats so the reshuffling i don't know i don't see how the city of santa barbara comes ahead with that but with the growth model i think we've got some potential thank you you my name is marilyn freeman i play at muni i also am the president of the ewga executive women's golf club who has our home uses muni as our home course and i guess i've been to a number of these meetings and i'm a little concerned that what i'm seeing today is a direction towards solving the short term issues how do we get the extra rounds let's put some money let's get some more golfers let's refinance the debt from when we remodeled twenty five years ago but i'd like to encourage you to look a little longer term the course is in as good a shape as it can be with the drought but the pro shop and the restaurant they're already looking like buildings that have been remodeled twenty five years ago i see that the plans that the numbers presented today show that if we have some growth we can get half of our reserve back i haven't seen numbers that say how do we get all of our reserve back what are we planning for the next remodel instead of refinancing from the twenty five year old model well anyway i'd just like to encourage you to look a little longer term find a solution that'll keep this place going so we're not all back here in five years going now what do we do okay thank you thank you any other public comment seeing none i will close public comment first questions from committee members i have a question mister hart you talked about the where the industry is right now in terms of golf is the ability to just go onto your smartphone click onto one website and you see all the t inventory in one place and you can just one click and you're in that's great it seamlessly talks to the people in the pro shop so that they know that that person is going to come and play at that time well the presentation today in response to what we asked for at the council meeting is just spectacular i think this is exactly what we're looking for really encouraged by the marketing effort you know taking this refinancing approach seriously these this the numbers look very different today than they did back in december and i'm very encouraged i think this is a right direction to be heading this is obviously very difficult you said at the very first sentence of the staff presentation you know predicting the future of golf is i don't pretend to think i can do that but i think that taking this step by step and taking this this incremental step in the right direction being optimistic about potential growth is the right thing to do i think we're just going to have to monitor it there there isn't a silver bullet that we can point at this that solves this permanently and out of respect to the last speaker that would be ideal if we could do that but that just isn't on our that's not in our toolbox but what we can do is to monitor this very closely and take incremental steps and and keep on top of it and see where these trends go and then respond to those as they occur so and in this step to increase marketing to the industry standard to grow golf to have the programs that folks have spoken about particularly the youth programs have a chance to grow young golfers and add them to two rounds responding i think more having the ability and frankly to respond with recycled water this year to make the course look better is a big change over last year and i think these are all really positive trends and i think we just are going to have to be patient to let those just state and and bear fruit and i think i just appreciate the direction that you've you presented today and think this is the right course mister white oh thank you mister chair i presume the questions got mixed in with your comments as well okay well the i would say one question that i have is about the certificate of participation that's an institutional document i mean that's that's not on the table for change unless i guess the general fund could could pay that off would be the what would be a that would be at least a way to attack that what's the interest rate on that certificate  participation the annual commitment annual payment that if the general fund we're going to take that on it would be a payment that the general fund makes of a hundred and eighty thousand for the next three years so land as something as a as a something to look at and i think that this is this happened once before i was discussing this with mister casey earlier i believe that the city lost the montecito country club in the in the depression  the air force property getting in our hands and this is a treasure that we it's it's one of the gifts that we've gotten and let's let's take care of it and i  come at these questions with with some similarities and some differences the the word resiliency comes to my mind as as as we look at these these years we here our staff su for example has been grinding on water but rates and meters and and getting down into the proverbial weeds to find where where are we spending money that we don't need to and i really appreciate the the efforts our staff in many areas are making and in particular your work has been really obviously really important it's very important to me when we have that therefore the range of sixty thousand dollars to five hundred thousand dollars loss there those are two different numbers for me sixty thousand dollars a year as mister hart would say a budget dust five hundred thousand dollars is not that's that's a that's a dirt clog and we clawed and we need up to if it's a five hundred thousand dollars number we need to be more all hands on deck than than sixty thousand marketing this has been i'm getting feedback from out there in the community that that is a a weakness of this system so i appreciate that this is now a a front burner issue for our staff and and for our team on this i'm very darn close to breaking even year in and year out it sort of just needs to be a stable system that's not pulling money out of the general fund year and you're out so at the same time i'm not willing to just cash in and sort of do the austerity move if this is our greece then we need to have some more supportive nurturing going on here on the very short term but i'm open to ideas out our maintenance we saw those numbers in the big report that we had months month or two ago and that that was a it looked to me to be somewhere between a quarter and a half a million dollar  uction in cost so it's not where i want to go i appreciate that i my my hierarchy of motivations is to keep our employment base i appreciate that even already the numbers here are significant number of part time workers are in this system and that there's even desire and even it would i can see why there be a desire to move back to more permanent employees more more at better morale better quality employees etc but when we're when our when our ship is is is leaking i'm not sinking but leaking that's not a time to be bringing on more permanent employees in my opinion so at the same time and i'm not sure i guess that was another question i was going to ask was are we talking about the the two contracts with mulligan's and pro shop today or is that for another discussion well i'm not clear on that that was an insightful comment that our last speaker brought up that this is beginning to look like a an older a remodel a facility that was remodeled twenty five years ago that concerns me a little bit i'm hearing that mulligans is doing really well and i've been there a few times myself and and it just it seems like it's got some vibrancy to it but obviously we have that's that's a facility that  gets hard use i also agree that the course of the competing courses glen annie i think is is is a could be a foundering operation in sort of middle you know in ten years time i'd be surprised if it's not either a development with houses all around it or a development that's where the water use is actually substituted out san marcos even is struggling  hearing so that's the elements that i would come back to today is i'm open to something in the refi area which would be soften the blow either in terms of if we do not see improvements over a year let's say you know next year year after then i think the notion of contracting out is is still a viable option which i more expensive to contract out maintenance but that's not my recollection from the from the report in december could you clarify that yes the it's hard to know which financial summary tables are being referred to and we know because of the difficulties in working with all of those different charts they took into consideration different factors for different analysis in those charts but the general savings from contracting out labor was around a hundred and eighty two hundred thousand  that number could increase more the report and i think when we went to council we assumed that the living wage would not apply to the management agreement but i think the council discussion was that that it it it would so i think the general savings would be somewhere between one hundred and eighty to two hundred plus if we were going to go back and look at that in terms of really doing it i think we'd want to do it in terms of kind of update those numbers because it's been a while since we did all that but that that it would be the correct bottom line that we get to ok and if i may councilmember white asked about the status of the two concessions when we were last at council i think the direction was status quo which would mean if if if that direction stays the same then staff would begin working on the two concessions they're two separate discussions and we're frankly not sure what we would do we haven't had that discussion  internally but but we would begin work on that just that then that's not on the table to today we've heard about that and yes you're always going to be open to comments in that but what we're talking about is the financial management today and then you'll be coming back to us with other proposals on the two concessions is that right finance committee members i think what what council asked was for us to bring you options specifically about refinancing the debt so what we would look for is a recommendation back to coun with you know refinancing the debt if that's something that you want to recommend to council we're operating on the assumption that if you were to do that that's the element that would change because the december th discussion was status quo okay but refinancing the debt we would look for you to provide that direction taking it back to council we would imagine that would happen sometime in february staff would like to have some clarity because we're in the process of developing our budget for the next two years so if in fact there's there's no change to the operating model proposed for sixteen or seventeen then we need to know that or at least sixteen two year budget and and if in fact you want to have further discussion about what other those other options are then we need to know that so we move the conversation forward and get to a point where you're able to give staff direction so does that help it does and i would say that from my perspective the the refinancing from from my perspective that's of course that's again that's not a big enough number to make any difference but the i suppose what ends up happening there then is that in order for the gulf fund get back to the red versus green slide it can it can survive by dipping into reserves going yet further into reserves this next year and i mean certainly that the twenty two thousand dollars doesn't make any difference to me but then from there refinancing certainly i don't expect the golf like three years from now there's different certificate of participation is fun is paid off i don't need this the general fund payment to go up talking about and that's currently requires about one hundred and eighty thousand dollars per year through two thousand and eighteen they've got the general fund alone which is interest only now but will become fully amortized starting after the seal peas are fully paid it's five hundred thousand so that'll require one hundred and eighty five thousand dollars starting in two thousand and nineteen right and then the fleet vehicle loan is being amortized at sixty thousand dollars through two thousand and eighteen the proposal that you saw where it showed the impact of refinancing is that we would refinance all of this debt okay each one and then would be essentially go away in terms of their current payment schedule what that means for the first item though is that the cop six hundred and fifty four thousand it would require the general fund to make those payments on behalf of the gulf fund put in three years right where the others would just be spreading out those payments longer okay what's the interest do we know what we don't know what the interest rate is on that cop is that right  guess it's in the five to six percent range so it's like the fully the full payment is one hundred and eighty thousand dollars per year okay so just to be clear we're gonna be proposed in reef an and finest all of this debt spreading it out and it does provide that budgetary relief in the short term refinancing this debt over a longer period of time at a lower interest rate or you is all of these yes charts at a lower rate for example the one hundred and eighty thousand dollars if you assume it's six percent interest to seal peas the general fold we've obtained that but only charging three percent interest to the gulf button over the twenty year period there you go that's that's important i think it's ironic that we would have had the investment report before this where we see that the city's general fund is getting one point five percent on its investments and we're making this is that we're basically charging the golf course six percent so that to me is a no brainer and that that is an absolutely defensible policy that makes that is the appropriate thing to do and that is i think the first step that we need to take is  that and then see where the numbers are after having done that as with the marketing unfolds as we give time for these things to take effect and then we'll just be back as we always are monitoring this closely and making sure that you know we don't have this turn from a sixty thousand dollars number to a five hundred thousand dollars number okay gentlemen i'll try to keep my comments brief and perhaps we can come up with a recommendation to the full council  obviously i agree with my fellow committee members that the golf course is a great resource for the city and we want to make sure that it continues in good health and hopefully in greater play at the same time we want to make sure that the golf course is financially self supporting and that means not just barely keeping its head above water if it dips into reserves but also accumulating enough money in reserves so that it can make the kinds of capital improvements that are necessary over time though i agree that the refinancing gives us a little bit of breathing room it's not a real solution to the long term financial problem what we're seeing in these most most recent numbers is that play is continuing to decline hopefully this new marketing effort will help turn that around or at least stabilize it but given the trends that we've seen in recent years we certainly can't count on that now the contracting out of the maintenance if that would save the gulf fund two hundred thousand dollars a year in expenses i don't see how we can avoid looking at that i mean that is the one obvious immediate cure this is not giving us breathing room this is actually solving the problem so what i would recommend if i were making the motion to counsel is that certainly we look at the refinancing that we say hooray to the improved marketing plan i think that's a good idea but i also think that we have to realistically look at contracting out maintenance as we are contracting out everything else at the golf course and if that is the only realistic move for keeping the golf course both self supporting and healthy as a golf course it's pretty obvious to me which choice we have to make so i i feel that we would be remiss if we don't at least recommend that the city council look at that because i don't think there's any other realistic solution but i'd be happy to entertain a motion i would move that we recommend that the council support the new marketing efforts and refinancing of the d that okay to make that part of the motion no is there a second well i would make a motion that i would make my colleagues motion and add that we include looking at contracting out next year second any further discussion all those in favor aye no thank you ladies and gentlemen the story continues