7.3.B. SR 03-20-2006
Item Description
Approve Pinewood Golf Course Budget and Acknowledge
Need for Short Term and Long Range Improvements to
Pinewood Clubhouse
Item Number
7.3.B
Prepared by
Bill Maertz, Parks and Recreation
Director
Reviewed by
Lori Johnson, City Administrator
City of Elk River
REQUEST FOR COUNCIL ACTION
Agenda Section Meeting Date
Administration March 20, 2006
Introduction
Pinewood Golf Course Budget
Discussion
Attached please find a proposed operating budget for Pinewood Golf Course. This budget includes the
lease of new maintenance equipment this is a four-year lease to buy program with ownership in the 5th
year. This budget is a conservative estimate based on 16,000 rounds in the first year. Projections show a
$10,355 loss in 2006 with a net operating profit of $43,210 over the next five years.
Several factors have changed this budget since the previous Council meeting. Property taxes of
approximately $4,500 per year will need to be paid on the property until the lease period of the purchase
is over. Another change is that the entire salary of the superintendent is included in the Pinewood budget.
Staff has determined that the superintendents frequently work up to 60 hours per week during the golf
season, thus staff recommends making the superintendent an exempt position with limited duties during
the off season in January and February.
Also attached are memos from the building inspector and fire inspector. The issues raised by these
inspectors will need to be addressed by a long-range plan for clubhouse improvements. Title transfer
requires a septic system inspection.
Council is advised that weather plays a pivotal role in revenue, thus making budget projections difficult.
Financial Impact
The lease of new equipment is absorbed by the operating budget. Minor building repairs to meet
immediate needs, are estimated at $15,000.
Operating losses for the first three years will total $16,641.
Attachments
. Memos from Fire Inspector and Building Inspector
. Operating Budget
S:\Council\ 71 B Pinewood budget memo revised for 2-20-06.doc
Pinewood Golf Course
Operating Projections
Rounds
Average Green Fees
Projected Projected Projected Projected Projected
Assumption 2006 2007 2008 2009 2010
16,000 16,500 17,000 17,500 18,000
3% $ 10.50 $ 10.82 $ 11.14 $ 11.47 $ 11.82
REVENUE
Green Fees Revenue
Golf Cart Rentals
Food & Beverage Sales
Merchandise Sales
Building Rental
Advertising
TOTAL REVENUE
3% $ 168,000 $ 178,448 $ 189,371 $ 200,789 $ 212,721
3% $ 10,000 $ 10,300 $ 10,609 $ 10,927 $ 11,255
3% $ 12,000 $ 12,360 $ 12,731 $ 13,113 $ 13,506
3% $ 2,500 $ 2,575 $ 2,652 $ 2,732 $ 2,814
3% $ $ 500 $ 1,000 $ 1,500 $ 2,000
3% $ 3,000 $ 3,090 $ 3,183 $ 3,278 $ 3,377
$ 195,500 $ 207,273 $ 219,545 $ 232,339 $ 245,673
OPERATING EXPENSES
Personnel - Clubhouse 3% $ 55,000 $ 56,650 $ 58,350 $ 60,100 $ 61,903
Personnel - Maintenance 3% $ 48,000 $ 49,440 $ 50,923 $ 52,451 $ 54,024
Payroll Taxes/Benefits @ 25% 3% $ 25,750 $ 26,523 $ 27,318 $ 28,138 $ 28,982
Total Personnel $ 128,750 $ 132,613 $ 136,591 $ 140,689 $ 144,909
Clubhouse Other Expenses 3% $ 14,500 $ 14,935 $ 15,383 $ 15,845 $ 16,320
Maintenance Other Expenses 3% $ 52,105 $ 53,668 $ 55,278 $ 56,937 $ 27,934
Taxes $ 3,500 $ 5,000 $ 5,000 $ $
Cost of Sales 3% $ 7,000 $ 7,210 $ 7,426 $ 7,649 $ 7,879
Total Operating Expenses $ 77,105 $ 80,813 $ 83,088 $ 80,430 $ 52,132
TOTAL OPERATING EXPENSES $2()5,855 213,426 219,678 221,119 197,042
$ (10,355) $ (6,153) $ (133) $ 11,220 $ 48,631
NET PROFIT/LOSS
Revenues
Green Fees
Golf Cart Rental
Food and Beverage Sales
Merchandise Sales
Building Rental
Advertising
Total Revenues
$ 168,000
$ 10,000
$ 12,000
$ 2,500
$
$ 3,000
$ 195,500
Expenses
4101 Salaries - Regular $ 66,000
4103 Temp Employees $ 27,000
Benefits, PERA, etc. $ 23,250
Personal Services $ 116,250
4212 Fuels and Lubs $ 2,500
4219 Operating Supplies $ 18,200
4259 Merchandise for Resale $ 7,000
Supplies $ 27,700
4319 Other Professional Services
4321 Telephone $ 1,800
4322 Postage
4331 Travel, Conference, & Schools
4349 Advertising $ 2,000
4359 Publishing
4361 Insurance $ 5,000
4389 Utilities $ 1,500
Taxes $ 3,500
440 I Bldg Repair & Maintenance $ 2,500
4404 Equip Repair & Maintenance $ 2,500
4409 Contractual Services
4415 Equipment Rental $ 28,105
4417 Uniform Rental $ 500
4433 Dues and Subscriptions
4438 Credit Card Fees $ 2,000
4440 Miscellaneous
Other Services and Charges $ 49,405
Total Expenses $ 193,355