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Phoenix Golf Enterprise Study, Ad-Hoc Committee Meetings and Recommendations January 23, 2013

Phoenix Golf Enterprise Study, Ad-Hoc Committee Meetings and Recommendations January 23, 2013. phoenix.gov/parks/golf/adhocgolf. 2012 Golf Enterprise Study. Financial impact of various options to address the ongoing Golf Enterprise Fund deficit

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Phoenix Golf Enterprise Study, Ad-Hoc Committee Meetings and Recommendations January 23, 2013

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  1. Phoenix Golf Enterprise Study, Ad-Hoc Committee Meetings and RecommendationsJanuary 23, 2013 phoenix.gov/parks/golf/adhocgolf

  2. 2012 Golf Enterprise Study • Financial impact of various options to address the ongoing Golf Enterprise Fund deficit • Does not include an analysis of any social or quality of life issues or Papago Golf Course Aguila Golf Course

  3. Golf Supply and Demand Phoenix Golf Average Rounds & Maricopa County Golf Courses

  4. Saturated Valley Golf Market Golf Holes per 10,000 People by Metropolitan Statistical Area

  5. Phoenix Golf Financial History • Rounds began declining in early to mid ’90s • Phoenix Golf began running annual deficits in Fiscal Year 1998-99 • Fiscal Year 2011-12 ended with an annual deficit of $2.4 million • Cumulative deficit at $14.8 million as of 6/30/12

  6. Phoenix Golf Financial History • 2004 Refinanced Golf Fund debt to lower cost • 2005 Golf Staff Reductions • 2007 Refinanced Golf Fund debt to lower cost • 2009 Defeased (paid off) all outstanding golf fund debt • 2009 Outsourced Papago Golf Course • 2012 Comprehensive Golf Study

  7. Operational Improvements • Many efforts over the years to improve revenue, quality of play, and operational efficiency • Representative examples: • Online booking of tee times • Volunteer assistants to improve pace of play • Driving range improvements at Encanto • Staff reductions that brought positions per hole 12% below national average

  8. Study Conclusions • Phoenix Golf has been operating more like other General Fund recreation activities such as softball or swimming pools. • Larger market forces have prevented Phoenix Golf from being self sustaining • The Phoenix area golf market, similar to the national golf market, has experienced declining rounds in response to the increase in golf courses over the last 20 years • Even with aggressive efficiency and revenue enhancement efforts, Phoenix Golf will not be 100% cost recovery over the next 5 years

  9. Cumulative Deficit • If Phoenix Golf should continue operating like our other public recreation programs : Annual Cost to 3PI or GF* * Does not include future major repair or infrastructure replacement costs.

  10. Golf Ad-Hoc Committee • Parks and Recreation Board appointed 11 person Ad-Hoc Committee • Process lasted approximately three months and involved: • Five public hearings were held at locations near each city golf course • Two work-study sessions held Encanto Golf Course

  11. Golf Ad-Hoc Committee Members

  12. Public Outreach • Golf Ad-Hoc Committee webpage created • Direct emails to more than 65,000 addresses in database • Post cards mailed to 5,000 households and businesses • Meeting dates/schedule mailed to 95 HOAs • Two public hearings recorded and posted on Committee webpage • Hotline established during process • Email link created for public comment

  13. Participation • More than 500 residents attended the five public hearings • 86 spoke at hearings • 123 provided public comment via email link • 36 left voicemails on hotline Cave Creek Golf Course

  14. Committee Recommendations • Keep all courses open • Eliminate Golf Enterprise Fund • Pay off cumulative $14.8M debt • Outsource course maintenance • Issue RFP to private sector to generate potential revenue through development • Expand food and beverage

  15. Committee Recommendations, cont. • Create advisory board of golf professionals and community advocates • Expand marketing plan/create marketing budget • Prepare five-year business plan • Explore deed restrictions • Develop five-year capital plan

  16. Recommended Action Plan • Revise 1982 Golf Enterprise Fund resolution • Pay down cumulative debt immediately • Issue RFPs for: • Outsourcing maintenance • Development opportunities • New food and beverage concessionaire • Firm specializing in golf course operations and creation of five-year business and capital plan • Issue RFP for management/operation of Papago • Establish annual Phoenix Golf Summit • Develop golf course deed restrictions

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