Municipal Property Corporation - Golf Course

MINUTES Board of Directors Meeting Douglas Public Facility Municipal Property Corporation A public meeting of the Douglas Public Facility Municipal Property Corporation was convened on Tuesday, September 21, 2021, at 5:30 p.m., at Douglas Golf Course, 1372 Fairway Drive. The following matters were discussed, considered, and decided at the meeting. 1. Call to Order 2. Roll Call Board members present were James Selchow, David Arzate, Nick Forsythe, and Manny Robles. Absent and excused were Kevin Alvarado, Tachi Durazo and Ruben Robles. City Official(s) present were Luis Pedroza, Interim City Manager. 3. Persons wishing to address the committee in writing or verbally on any item not on the agenda. Nick Forsythe addressed a former item that was discussed in a past meeting regarding the City of Douglas taking over management and suggested it was an item that should be placed on future agendas. 4. Approval of Minutes for the Douglas Public Facility Municipal Property Corporation (MPC) for board meeting held on June 15, 2021. Motion by David Arzate, second by Manny Robles to approve the minutes for June 15, 2021, with a correction to change “Matt Irvine” to “Matt Urban”. Motion unanimously passed. 5. Report on Balance Sheet and/or Bank Balance(s) update/report on current months for the Douglas Public Facility Municipal Property Corporation, as well as discussion/presentation on the MPC Golf subsidy (if report is available). James Selchow reported the bank balance was $33,800. Mr. Arzate inquired how much of the IDA grant was unused within the bank balance. Mr. Selchow reported there was between $4,500 and $5,000 left from the IDA grant. Luis Pedroza presented the following report for the fiscal year: • Total revenue generated was $212,000 • Total expenses made were $412,706.71 • Total subsidy was $215,821.69 which was $35,821 above target subsidy. • Bar sales were lower by $30,000 (affected by Covid-19). • RV park rentals were greater by $31,000 (affected by the border wall constructors). • County Club events were budgeted for $42,000 but only reached $18,088 • Insurance was $10,000 higher than expected; expected to be $19,000, but was $29,000 Mr. Arzate inquired what issue(s) caused the subsidy to be $35,000 over the target subsidy. MINUTES – SEPTEMBER 21, 2021 1 Mr. Pedroza attributed the higher amount to the building maintenance, liquor purchases, and ice machine purchase. Mr. Arzate inquired why the insurance cost was so expensive. Mr. Pedroza informed the group that no one wanted to insure the golf course which led to seeking an insurance company that would at a greater cost. Additionally, Mr. Pedroza stated the golf course was considered a higher risk because of the fire zoning and age of the building. Mr. Selchow reported there were two weddings the last two weekends, both with positive bar sales. Additionally, Mr. Selchow reported October was expected to be a good month for event bookings and there would be an upcoming golf tournament. 6. Discussion/Presentation/Direction and possible decision regarding the proposed 2021/2022 budget for the Douglas Public Facility Municipal Property Corporation (MPC). Mr. Arzate commented if they did not increase revenues or the subsidy, there was a possibility of a -$35,000 balance for the fiscal year 2021/2022. However, Mr. Arzate felt it could be balanced with the $180,000 income and operating costs of $415,000 along with a $35,000 increase of bar sales which may prove difficult to attain. Mr. Forsythe pointed out there was no money budgeted for the “auto and equipment” line item and inquired if the City of Douglas could donate used/replaced equipment. Mr. Pedroza noted $20,000 was allocated for a mower, but it was unknown when the mower could be acquired. Additionally, Mr. Pedroza commented the City of Douglas provided help whenever the MPC needed it and would continue to do so when capable. Mr. Forsythe noted the “electrical maintenance” and “chemicals” line items were projected at $0. Mr. Pedroza informed the board that the funds were lumped into the “grounds maintenance and supplies” line item in the amount of $37,425. Mr. Selchow requested a motion for approval before continuation of discussion. Motion by Manny Robles, second by Nick Forsythe to approve the proposed budget for 2021/2022. Motion unanimously passed. Mr. Pedroza recommended to either eliminate or fund the line items Mr. Forsythe addressed. 7. Information/Update on potential sale of the Douglas Municipal Golf Course by the City of Douglas. Mr. Pedroza reported the investors had continued interest in the sale of the Golf Course and were actively studying the water component in regard to how much water is consumed and the actual cost related to the consumption. Mr. Forsythe inquired if the City’s affluent water was to be provided to parks and the golf course in the future. Mr. Pedroza stated it was a project that would take years until it came to fruition. Mr. Arzate inquired how many investors were interested in the sale of the Golf Course. MINUTES – SEPTEMBER 21, 2021 2 Mr. Pedroza stated there were two investors who were interested. 8. Information/Discussion, and possible Decision pertaining to aspects to be presented in the periodic standing report from staff regarding maintenance of the golf course MPC facility, equipment, greens/fairways and water delivery system. Mr. Selchow reported the following: • The roof in the kitchen/dishwashing station was repaired. • In accordance with the Health Department there was a need for resurfacing the floor behind the bar within six months. • Mario from the City of Douglas worked on the pedestals. • Best Way installed the second pump in the back nine but they cannot program it because there were issues with the pedestals. Mr. Selchow requested for Rene Rios to call Best Way and identify the issue. • Water restrictions were in continuation from 8:00 PM to 8:00 AM. • Complaints were received and handled regarding weed overgrowth near the apartments. • One particular inmate performed phenomenal mechanic repairs to include fixing a mower. Manny Robles suggested the possibility of securing a backhoe through a government auction. Mr. Selchow reminded Mr. Robles that money was allocated to buy a mower and inquired if delivery transportation was an issue. Mr. Pedroza clarified due to backorder and timing issues, the mower had not been acquired yet. Board members commended City of Douglas employee, Johnny Chavez for his assistance. Mr. Arzate inquired what the winter plan was for the back nine. Mr. Selchow stated he planned to aerate the greens and put seed down, however there was no money to oversee the fairways. Moreover, Mr. Selchow described the unfortunate restriction on water during the most important time of the growing year had a significant negative affect on the greens. Mr. Arzate expressed his concerns regarding the lack of funds and demographics to afford and promote an eighteen-hole course. Furthermore, Mr. Arzate suggested the convenience of maintaining a nine-hole course instead of the eighteen-hole course. Mr. Pedroza reported the water issues were manifesting and noted there was even the possibility of restricting water to the community because the absence of three wells caused the water table to drop. Moreover, the only solution to increase the water table was to dig deeper or dig elsewhere which would cost a lot of money. Mr. Arzate encouraged the board to think outside the box because the risk of losing the back nine holes continually presented itself despite the efforts made to maintain it. Moreover, Mr. Arzate stated the back nine holes were no longer presentable for homeowners and the board should focus on the front nine holes instead. Manny Robles argued the work that was done could still save the back nine holes. MINUTES – SEPTEMBER 21, 2021 3 Mr. Arzate commented the work done was not sustainable. Mr. Selchow agreed with Mr. Arzate and stated it was one step forward and two steps back. Mr. Arzate suggested to focus all the resources on maintaining the front-nine holes. Mr. Selchow noted if the sale goes through, the problem may be solved. One board member (inaudible name) commented the nine-hole course packaged with the apartments sounded more ideal from a marketing perspective. Many Robles inquired in the back nine holes were playable . Mr. Selchow answered it was not playable due to the weeds and the mud. Mr. Arzate suggested to take the healthy greens and replant them on holes eight and nine in an attempt to beautify the front nine holes. Additionally, Mr. Arzate inquired if there were any legal obligations to the back nine. Mr. Pedroza stated there were no obligations as the bonds were paid off. Furthermore, Mr. Pedroza commented the inefficient watering systems and nonworking pedestals are never ending issues. Mr. Selchow commented he had the idea of hiring a golf course management service as many cities in Arizona have done so already. Mr. Selchow explained it had been difficult to manage the golf course with limited knowledge and resources. Mr. Pedroza commended the board for having had the conversation of minimizing the golf course to nine holes and seeking other options for management. 9. Information/Update with a possible Discussion/Decision on current events, updates or concerns at the golf course since the June 15, 2021 meeting. Mr. Selchow reported the following: Past events included: • Two weekend weddings • Golf tournament • Labor Day weekend golf tournament which brought in a total of 92 golfers and 46 teams. Upcoming events included: • Class of 1961 reunion. • Cochise College Rodeo meet and greet. • Multiple weddings for October. Mr. Pedroza informed the board for future tournament and events, marketing was available through the City of Douglas. Board members requested website maintenance assistance. Mr. Selchow reported there were RV 25 spots available and hoped to rent them for the winter time. MINUTES – SEPTEMBER 21, 2021 4 Mr. Selchow expressed his interest in stepping down from his position as chairman and proposed to elect a new chairman by November. Manny Robles suggested to hire a leadman to run the golf course as they once did in the past. Mr. Selchow stated although it was an ideal option, the issue was to hire someone who was experienced and offer good pay and benefits. 10. Discussion and direction/consensus for items to be discussed at future meetings. Board members suggested to include the following items in the next agenda: • Discussion/Decision on election of a new chairperson. • OB Sports management services • Discussion with a possible decision on continuation of an 18-hole golf course or minimizing it to a 9-hole golf course. The next meeting was scheduled for the third Tuesday of November. 11. Adjournment Motion by Manny Robles, second by David Arzate to adjourn the meeting at 6:40 p.m. Prepared by: __________________________ Jesalen Luna, Deputy City Clerk MINUTES – SEPTEMBER 21, 2021 5