Prescott
AZ

Council Memo
1639

Antelope Hills Golf Overview Presentation

Information

Department:Recreation ServicesSponsors:
Category:Presentation

Attachments

  1. Printout

Document Comments

Recommended Action: For discussion only, no action required.

Body

Item Summary: This presentation will be an overview of golf course operations including financial performance, programs, capital improvements and the Billy Casper management agreement.

 

 

 

 

Meeting History

Sep 12, 2017 1:00 PM Video City Council Study Session Meeting
draft Draft

Joe Baynes, Parks and Recreation Director, presented the overview of Antelope Hills Golf Complex, which is the only 36 hole golf complex in Yavapai County. Mayor Pro Tem Lamerson asked Mr. Baynes what this infrastructure in dollars represents to the city. Mr. Baynes advised he wanted to do an economic impact study, but costs got in the way of completing it, but the value of the property goes far beyond revenue and expenses. In the beginning of 1956, the north course was built and in 2014 the city began managing and performed both business operations and maintenance rolls of Antelope Hills with degrees of years of success. About the year 2000 the golf industry began seeing more competition and a decline in golfing, which pushed municipalities and other golf course owners to look at alternative models. In 2013, Council gave direction to transition the golf courses to the Recreation Services Department and keep the accounting separate for clarification and accountability. Through a Request for Proposal process, on April 8, 2014, Council approved a 5-year management contract with Billy Casper Golf and on May 1, 2014, they assumed the business operations of the transition. This is Billy Casper's fourth year of initial five year contract and it is the fourth largest golf company in the United States. The city pays them for their expertise in marketing and in managing the golf course property. All the revenue and expenses incurred at the golf course are to the city. The employees are managed by Billy Casper. The city pays them $84,000.00 per year, plus incentives based on revenue that they produce, but not to exceed $168,000.00 annually for their services. In 2016 Billy Casper was paid $111,000.00 annually for their services. Billy Casper submits an annual budget and has to be approved by the City Council through the budget process.

Mr. Baynes stated that the Antelope Hills Golf Complex offers many things and went over some of the historical information. Billy Casper is responsible for anything that touches revenue and this includes golf carts, full service restaurant and bar (Manzanita Grill), 160 seat banquet hall (Centennial Center), driving range, beverage carts, Pro Shop as well as the service of third party golf lessons. The city retain a small percentage of this gross revenue. There is also a total maintenance side of 215 acres of property, includes two 18-hole golf courses, a maintenance facility with a mechanic shop, cart storage barn, two parking lots with 298 spaces and all the landscape maintenance. They also maintain the Manzanita Grill (6,000 square feet), Centennial Center (4,000 square feet) and four on-course restrooms. It is a large facility and cost to the city is about $1.3 million a year to maintain.

Mr. Baynes stated that the national trend average with golf flattened out in 2014. but since working with Billy Casper, Antelope Hill Golf Course has increased number of customers . He stated they do not have the benefit of an economic impact study but took the analysis for softball tournaments and applied same for golf tournaments, which is a $550,000.00 economic impact and then out of area rounds and came up with another $600,000.00. Future growth of Antelope Hills is very positive, especially with the timing of Arizona Eco Development and Deep Well Ranch, should increase sales and will bring in golfers due to position and type of facility. The golf course is also a conduit for local charities Also supported are 30 special ollympians who practice out of Antelope Hills, high schools, Embry Riddle' as well as Junior Golf programs.

Mr. Baynes introduced Billy Casper Golf's Regional Director Scott Justman, Tom Prince from Marketing and from Antelope Hills General Manager Rhonda Boyd. Mr. Justman reported what's driven the change was represented by growth of rounds and reduction of loss, and the growing loyalty to Antelope Hills. They also have 1,300 members of the loyalty program that continues to increase revenue at the facility. He continued that one of the strategies is not flat pricing model, but they analyze from heat map occupancy, seasonal and timing to close that gap and increase revenue. Events in general is a very stable item of what Antelope Hills operations, golf and non-golf events, dining experiences, new golfing and night golf events presents and they continue to strategize for the future.

Mr. Baynes advised that Council would be voting on golf purchases for Antelope Hills in the next meeting. He explained the golf cart fleet at Antelope Hills is entering 7 years and typical life span is 4 years. The batteries were replaced at 3 years and at the end of usability. The revenue from golf cart rentals in FY17 was $539,000.00 and the purchase price for the new carts is $519,000.00. Payback is in less than one year. They received bids on golf carts and selected E-Z-Go Elite Cart which utilizes a lithium battery technology and guarantees their batteries for 5 years (which is the largest part of maintenance of golf carts). The labor and electric saving vs. the traditional lead acid carts is about $228,000.00. The E-Z-Go carts are about 280 pounds lighter then traditional carts and will be better with ground compaction with turf and will hold up better on the golf cart paths. These carts also charge quickly in about 30 minutes (time is revenue) and they anticipate life of these new carts to be 6 years.

Councilman Blair confirmed how the golf course generates revenue for the city. He asked how many full time employees did they suspend off the city's payroll, when Billy Casper took over? Mr. Baynes advised there were 6 full time employees suspended. Councilman Blair stated that was a trade off of approximately $111,000.00 to Billy Casper, which was the cost of those employees suspended and a significant trade off and beneficial changes.

Councilman Lazzell said when he was out playing golf recently, the golf carts were not running properly and this is a necessary purchase and still taking care of the taxpayer's money.

Councilwoman Wilcox inquired how much it cost to play 36 holes, rent a golf cart, and a set of clubs and in comparison to how the costs compares to other courses open to the public in the Prescott area. Mr. Baynes explained there are many ways to look at this and referred to the Advantage Card (discounted costs) that Mr. Justman from Billy Casper discussed. It would cost $65.00, and in comparison to other courses, it would be a very competitive cost. Antelope Hills is a regulation golf course, very well maintained, very competitive and paying for the property. Councilwoman Wilcox asked if the fees could be raised slightly to increase revenue. Mr. Baynes stated there will be a small increase of $2.00, which could be around $140,000.00 and part of their strategy moving forward.

Councilwoman Orr said that Antelope Hills Golf Course is a beautiful and great asset for the City and it is important to keep prices affordable. The Deep Well and Arizona Eco Development will not be building a golf course and their communities will be very supportive of it. Centennial Center has amazingly improved and is working well. She has been a volunteer for Special Olympics and its huge give back to the community. She asked about the construction will it place a dent on some of the play. Mr. Baynes stated that the round-a-bout on Perkins Drive will impact them in the next fiscal year.

Councilman Sischka asked if Recreation Services does maintenance and does the course pay Recreation Services for the maintenance. Mr. Baynes confirmed that Recreation Services is paid out of the Enterprise Fund (that funds the golf course and paying ourselves). Councilman Sischka advised that the golf industry is encouraging shorter 9-hole forays. Mr. Baynes said the trend in golf is to quicken the time and play 9 holes, which are available, and they need to build more forward tees especially for the women. Also, in the plan is foot golf (combination of soccer and golf) to see how that would impact the golf course and introducing another use for the golf course. He isn't sure if will create more revenue, but it could show golf course as more of a public community asset. They have a foot golf tournament coming up that benefits the youth soccer organization. It is very easy to implement and less than $2,000.00 to buy equipment.

Councilman Sischka asked what the economic impact study costs and Mr. Baynes stated the National Golf Foundation was going to charge about $20,000.00 to $25,000.00.

Mayor Pro Tem Lamerson said that was a lot of money to spend on golf carts, but he sees the fiscal investment this community has in the golf course. It is invaluable to the community..

Councilwoman Orr asked Mr. Bayes and John Heiney, Community Outreach Manager, if the Buxton Report could provide any information on the golf course. Mr. Baynes stated that per Mr. Heiney, there is possibly a way the Buxton report could break out the purchases at Antelope Hill. Councilwoman Orr asked for an explanation of foot golf. Mr. Baynes explained it's getting very popular in the valley and they are larger holes and takes about 45 to play 9 holes.

Mr. Lamar asked if he would be comfortable in revisiting the maintenance element. Mr. Baynes stated they did a very broad Request for Proposal and decided on a hybrid model where the city still does the maintenance and Billy Casper completes the business operations. If Council desires they can check with Billy Casper to see what they charge to run maintenance or place it out again. He confirmed there are 9 full-time city employees currently working at the golf course.

Mayor Pro Tem Lamerson wanted to reiterate the overall benefit of the golf course and it is a great investment to the community.

Mayor Oberg stated he's been hearing the Pro Shop needs more inventory. Mr. Justman responded absolutely and the member loyalty program continues, with the new carts and slight price increases they will be bring more products to the Pro Shop.