Loading...
HomeMy WebLinkAboutGolf Board - Minutes - 02/15/1995CITY OF FORT COLLINS CULTURAL, LIBRARY, AND RECREATIONAL SERVICES GOLF BOARD CITY COUNCIL LIAISON TO THE BOARD: Councilman Bob McCluskey, Jr. STAFF SUPPORT TO THE BOARD: Jerry P. Brown, Assistant to the Director/CLRS; and Alyce Nierman, Golf Division Secretary. MINUTES: Regular Meeting of February 15, 1995 The meeting was called to order at the Collindale Golf Course Clubhouse by Board President Henry Fry at 7:00 p.m. Golf Board members introduced themselves to the approximate 50 citizens present. AGENDA REVIEW: There were no changes to the printed agenda. APPROVAL OF MINUTES Cindy Roper requested that on page 3 the first sentence stating her comments on junior golf be removed from the minutes as she does not recall making a statement to that effect. Further, on page 8 of the minutes Mindy Markley was the Board member who agreed to serve with Henry Fry on the committee to look at the future of golf in Fort Collins. It was moved by Tom White and seconded by Tom DeGrand that the Golf Board minutes of the January 18, 1995, meeting be approved as amended. The motion passed unanimously (9:0) CITIZEN PARTICIPATION: Ron Bruce requested some time during this portion of the agenda to request assistance in persuading Columbine Cable to offer the Golf Channel. To show Columbine that there is an interest from the local community they would need to have a petition signed by 2,000 people. The channel would be available for $7.00 per month. It was explained to Mr. Bruce that his petitions could be placed at the three municipal courses. However, City staff could not monitor these petitions. Mr. Bruce stated that he would be responsible for collecting signatures. Mary Hodge asked if these petitions would be placed at other golf course pro shops around Fort Collins, and Mr. Bruce responded that he will be contacting the other courses for placement of these petitions. PRESENTATION BY LOUIS SCHARF PROTESTING GOLF ANNUAL PASS FEES AND REQUESTING A NEW FEE STRUCTURE INTRODUCTION/GROUNDING: Jerry P. Brown, Manager of Golf, introduced himself and said Mr. Louis Scharf would be making a presentation to the Golf Board. The Golf Board can choose to change the format by vote. The City Council uses an appeal process which we are trying to modify for Golf Board Minutes February 15, 1995 Page 2 our needs. First the Golf Board acts in an advisory capacity. The budget process is defined by the City Manager, with the culmination of this process being a presentation to City Council in the fall. The 1995 fees process began last spring. A subcommittee of the Golf Board met through the summer and made a with presentation to the Board in September. The first public presentation was in September and the second public presentation was heard by the Golf Board in October. At that time, the Golf Board voted on their recommendation to City Council. The Council's vote occurred on November 1. Since that time several letters and correspondence have been received regarding the 1995 fees. After tonight's presentation, if the Golf Board recommends changes to the 1995 fee structure, approval of any changes must be made by City Council. PRESENTATION BY LOUIS SCHARF: Mr. Scharf thanked everyone in attendance tonight for coming to hear his presentation. He said he feels there is resistance from Golf Board members and Jerry P. Brown, but is asking to be heard out. SECRETARY'S NOTE: Attached to these minutes is a printed copy of the statistics and verbage used by Mr. Scharf during the presentation. Mr. Scharf closed his presentation with an appeal to the Golf Board to freeze annual pass fees and pass per play fees at the 1994 level. PRESENTATION/RESPONSE BY HENRY FRY: Golf Board President Henry Fry had previously distributed information regarding his position and did not review the full report. People can review that information at their leisure. Mr. Fry stated that he has been involved with the Golf Board over the past eight years. The first few years was as an interested golfer attending Board meetings. The process used to develop fees and comparisons have been the same from year to year. During that eight year period he has not heard Mr. Scharf complain about the use of the figures. There were a lot of numbers shown tonight, but it comes down to the individual golfer making an analysis if an annual pass would be a good buy. when the fee structure committee started meeting, in comparing revenue vs expenses, we needed to come up with $106,000 additional revenue. We've looked at the numbers in a consistent way over the past eight years in fees and how they relate from one year to next. The Board has been asked to make changes, but doesn't see any suggestions of what should be done. We have been told in the past that the discounts we offer may be too great. QUESTIONS BY BOARD MEMBERS: Golf Board Minutes February 15, 1995 Page 3 Mindy Markley asked Mr. Scharf if he has looked at the dollar amounts people are saving? Mr. Scharf stated that we are getting affordable play for seniors and juniors. Cindy stated that Jerry may have a system that people disagree with, but the point is still that budgeting and golf in Fort Collins is great and we have a great program. Further, any changes recommended does not mean that Jerry is wrong or that Mr. Scharf is right. Mary Hodge asked Jerry if the fees were frozen at the 1994 level is there an estimate how this will affect our over all financial picture. Jerry had not figured this out, but would guess around $35,000. Mr. Scharf made a very valid point noting the decrease in annual pass purchases. Armon Johannsen observed that at the time 1995 fees were set, 1994 year end balances were not available. Jerry confirmed that we were using actual 1993 figures with 1994 projections. The numbers Henry used in his presentation were exact numbers. The final figures for 1994 show an excess in the projected revenues of $57,000 and a savings of $35,000 in the projected expenditures. This will take the Golf Fund into 1995 with approximately $100,000 in reserves. Mindy commented that she didn't get an answer to her questions regarding the actual dollar amounts, not percentages, being referred to for increases. Being a pass holder is a choice, and each golfer needs to make their choice based on financial issues and convenience. Tom White commented that Mr. Scharf is asking us to freeze fees, but we're not getting any suggestions of ways to come up with the additional dollars to run the golf courses. Mr. Scharf saw tonight's presentation as a way to show that Jerry Brown was presenting phony figures, and this data is so wrong an informed decision cannot be made. David Shands agreed that we finished 1994 pretty strong, and started 1995 with a lot of play. The Golf Fund reserve is now approximately $100,000, which puts the Fund back to where the Board would like to be situated. Jerry noted that the Golf Fund received a bonus coming out of 1994 with the weather holding out. David stated that in addition City Council gave the Golf Fund $45,000 for capital outlay. This amount could be eliminated if Council chooses. David commented that when the fee structure committee met and made their recommendations it was in July and August; and the proposed increases were based on the financial situation at that time. Frank Blanco wondered if there is any way to get away from submitting budget proposals in the fall? This would not be possible as all city operations and departments submit their budget proposals at that time as required by the City Manager in June, and by City Code the City Manager must submit a budget by September 1. Golf Board Minutes February 15, 1995 Page 4 Jerry stated that the Golf Fund uses five year averages, as that gives a good picture and takes into account possible weather conditions. Mary Hodge asked how other area cities estimate their golf revenues? Jerry stated that Loveland, Longmont, Boulder, and Greeley develop their budgets in the same manner he has used in Fort Collins. At national conventions where Jerry was in attendance he has checked to see what other systems are being used. Mr. Scharf's basic premise is correct. One thing Jerry learned at national conventions is that a little more than half of those attending are municipal courses. Private courses generally exclusively record 18 hole rounds and 9 holes are recorded as half rounds. The advent of 9 hole play is a newer phenomenon occurring quite heavily along the front range of Colorado. In Fort Collins we have seen more 9-hole play for a longer period of time with the first course in town being City Park Nine. Armon gave Mr. Scharf credit. However, he is unsure if the Board can change back to 1994 fees as we are unsure how it would affect the Golf Fund budget. From the start he did have a concern about the 100% increase in the per play fee; it was the only part of the recommended fee structure that seemed high at the time. Jerry said it could impact the Golf Fund around $35,000. Tom DeGrand asked for a show of hands from those present at tonight's meeting, who are annual pass card holders (approximately 90% of those in attendance). Mike Powers gave a brief background on how the Recreation Fee Policy came about and received approval from City Council. In a market place decision there are three pieces to the equation: the customer (social issue), the business and competition in the market place (Jerry's balancing of the budget), and third piece is the governing body. All of these voices need to be heard, and in .balance. The Golf Fund is designated an Enterprise Fund by the city and has to make a profit or break even. It was asked if City Council perceives golf as a rich man's sport, and what is the belief of the Golf Board? Henry added that the green fees players are also getting an increase in fees. David Shands pointed out that the Sales and Use Tax Fund is subsidizing $200,000 per year to pay off the SouthRidge debt. CITIZEN INPUT: Ed Faillace stated that when he came this evening he didn't understand the figures presented by anyone. One point brought up that no one came back to is that Fort Collins is slowly but surely losing pass holders. Add that to the statement that Jerry Brown is against pass holders, he would like to hear Jerry's point of view on annual passes. Golf Board Minutes February 15, 1995 Page 5 Jerry responded that on a professional level when he started in 1979 his charge was to keep the budget balanced. At that time we were still receiving Federal Revenue Sharing funds; in 1982 those funds dried up. City Council said golf had to be self-supporting. In 1986, City Council raised the question why the Golf Fund is not fully paying the SouthRidge debt. The people serving as Council members in 1986 were different than the members sitting in 1981 when the deal for SouthRidge was set up. One idea Jerry looked at was the elimination of annual passes and then review the number of other discounts given. Personally Jerry viewed passes as a financial drain to the rest of the system, and was pretty convinced that annual passes were a subsidy and loser. In 1989, a comment' was repeated that the green fee golfers were not upset about senior pass play benefits as they were looking forward to receiving the same benefits when they retire. Since then, he has accepted that annual passes are a fact of life. Ed Faillace said there is no doubt Mr. Scharf has a mathematical background. Mr. Faillace suggested keeping the fees for 1995 the same, but have Mr. Scharf explain his ideas in more detail and make use of his talent. Try to keep confrontations down, and work together. Ed Faillace further observed that if Mr. Scharf has a system that could help us, we should take advantage of his knowledge. Henry, who served on the fees sub -committee, wanted to clarify the point that annual passes were seen as viable and should be maintained. The Board was asked, when presented with the argument to raise fees, if they ever heard 12.2% increase in fees? Jerry stated that when we were discussing 5% and 10%, these figures were for total operating revenue increases, not specific pass fee increases. The 12.2% was a projection based upon 1993 data projecting through to 1995. This same information was included in the packets presented to City Council for their use. Dick Ward made one last request; he would like the Board to revisit prime vs non -prime time to consider week days as non -prime time and weekends as prime time. Louis Scharf relayed that in a meeting in Jerry Brown's office it was stated by Mr. Brown that he has been chipping away at annual passes for the last few years. City Council and the Golf Board have stated their support of continued pass use, but he feels Jerry Brown has his own agenda. Ed Faillace has a problem with Mr. Scharf making that statement as he has known Jerry Brown for some time and Mr. Brown is too smart a city employee to make such a comment. We should not lose sight that there has been a lot of good work done here tonight, and Louis Scharf has alerted us to a different, possible way to look at how fees are developed in the future. Henry Cross stated that he resents any implication that Mr. Scharf Golf Board Minutes February 15, 1995 Page 6 is cooking books. Mr. Cross further stated that he has known Mr. Scharf for many years and is a man of integrity. Jim Allen shared a few thoughts. There are a number of courses in the area, and pass holders are pretty much tied to the local courses; the Fort Collins courses need to be compared to other golf courses in the area. Harold Asmus stated that seniors who play five days per week will be paying $800 more with a pass to play golf in Fort Collins. Dick Ward asked Henry Fry to justify the figures he presented. Henry referred to the information distributed that includes the figures he used. David Shands feels we have lost focus on tonight's discussion. He views the issue boiling down to how much it takes to have a quality golf experience at our city courses. Dick Ward stated that many pass holders are undecided on whether to purchase their pass until after a decision is reached by the Golf Board and City Council on tonight's presentation. BOARD MEMBER COMMENTS AND VOTES: Frank Blanco began by asking if there are options the Board can be considering tonight? Henry stated the Board has a couple of options. We can decide to do nothing and retain the 1995 fees approved by City Council; the Board can choose to stay with the fees for 1995 but begin a review process of the fee structure and how fees are recommended for use in developing the recommendations for 1996 fees; or the Board could choose to pull the cord and review this situation now and make a recommendation for changes. Frank speculated that maybe something could be negotiated. Henry stated that if the Board decides to change the approved 1995 fees, we will need to make a recommendation to Council. However, Henry personally thinks it's a little late to be messing around with 1995 fees. He further wishes there was more citizen participation at an earlier date, during discussions on the fee structure. The Golf Board agendas are public information and meetings are held at pre- determined places. It is appalling that we need to get to this point before getting this plethora of information. Henry summed up that he feels quite strongly that we should live with what we have established for 1995 and start reviewing how these fees will be established for 1996. Armon Johannsen asked how much time does the Board have? Jerry stated that to achieve discussion at the March 7 Council meeting, we need to have our recommendations tonight for the review process one week from now. One option is to schedule another meeting before the next Board meeting. Implementation of the 1995 per play fee has already been postponed to March 1 to coincide with the pass renewal dates. We could extend a freeze for an additional month. 0 1] Golf Board Minutes February 15, 1995 Page 7 Staff would like to have a recommendation from the Golf Board tonight. If unable to make a decision, it is recommended that another meeting be scheduled for March 1. Armon felt when 1995 fees were originally discussed a 100% increase of per play fees for annual pass card holders was too high. Henry Fry moved that the Golf Board recommend leaving the approved 1995 fees as is. He further moved that the Board seek suggestions and solutions to more equitably determine fees for the 1996 season. The motion was seconded by Tom White. In discussing the motion it was suggested that Mr. Scharf participate in these dialogues. David Shands feels there has been enough information brought forward that the Board should reconsider; however the information presented needs to be digested. David Shands further feels the Board cannot recommend rolling back fees to the 1994 level until we know how that will affect the 1995 budget. It was asked if Mr. Scharf agrees to that? Henry clarified that was not part of the motion, but agrees that full participation by everyone concerned would afford the best solutions. Frank Blanco thinks that the Board is creating the impression we are against seniors and season pass holders. As there was no further Board discussion on the motion, Henry Fry called for a vote. Mary Hodge declared that she would abstain from voting on this issue due to a perceived conflict of interest. Those in favor of the motion were Tom Degrand, Tom White, Cindy Roper, Henry Fry; those opposed were David Shands, Frank Blanco, Armon Johannsen, Mindy Markley. The vote was 4 in favor - 4 against. The motion failed. Another motion was then made by Armon Johannsen that in light of the 1994 year-end balance and taking into consideration Mr. Scharf's comments, that the Golf Board should revisit the pay per play fees and costs for 1995 year. Further that another meeting would be scheduled to consider and discuss this topic. David Shands seconded the motion. The Board began discussion of the motion. Cindy Roper commented that a lot of work went into the decision made by the Golf Board, and she is a little resentful of some of the comments made this evening. In addition, Board members are not receiving the same respect that most people attending tonight are asking the Board afford them. The Board is trying to make everything equitable. Henry's personal opinion is the numbers would not be different at a later date and putting off this discussion is just a delay. Mindy asked that it be clarified that the base fees for annual passes were not raised; only the per play fee was raised. Dick Ward asked if area golf courses were raising their fees. It was responded that fees are being raised in some other communities Golf Board Minutes February 15, 1995 Page 8 also, however, they are also losing pass purchasers. Henry observed that the same number of pass rounds were played in 1994, but there were less annual passes purchased. Tom DeGrand recognized that a number of people here tonight have been in previous discussions. At the Board meeting in September, 95% of the people in attendance were seniors. At these meetings everybody has recognized the fact that we have bottom line. The senior golfers state they know the Golf Fund needs more money, but don't raise our fees. The junior golfers state they know the Golf Fund needs more money, but don't raise our fees. Here we are in February and golfers are still saying they understand we need to raise the fees, but don't raise ours. However, he does agree with Armon's suggestions to revisit this topic of discussion. Tom then asked for a clarification of the motion; is it to review the total fee structure for 1995 or just the fees relating to annual passes? Armon clarified the discussions would be open to discuss total golfing fees; pass fees and green fees. A vote was called for on the motion on the floor. Four Board members voted in favor of the motion (Tom DeGrand, David Shands, Frank Blanco, Armon Johannsen); four Board members voted against the motion (Cindy Roper, Tom White, Henry Fry, Mindy Markley). The motion failed to pass (4:4). Mr. Scharf suggested a way to raise the number of pass holders and keep the fees fixed would be to wipe out the distinction between prime and non -prime time. Tom White commented that the Fee Structure sub -committee and the Board spent many hours discussing prime and non -prime time fees and determined the distinction was of value. Henry stated there had been two motions and two deadlocked votes. If there are additional motions from any Golf Board member, it was suggested they be made at this time. No additional motions were made at this time. REVIEW OF REVISED GOLF BOARD BYLAWS Due to the lateness of the hour it was agreed that the Board delay discussion of this item to a later meeting. REQUEST TO CHANGE THE MARCH MEETING DATE The next regularly scheduled Golf Board meeting is March 15. This date falls during spring break and conflicts will keep many Board members from attending this meeting. After discussion of dates that would be acceptable to the Board it was the consensus that the March 15 Golf Board meeting would be rescheduled to Wednesday, March 1. Golf Board Minutes February 15, 1995 Page 9 OTHER BUSINESS -- Doug Evans, Golf Superintendent/Collindale, reported on the pump station project. The low bid received for the pumps was $49,000. This is a reputable company that has installed a couple of systems for the Parks Division. Doug will be meeting with a couple of people for discussion on whether the bid meets the specifications stated as some alternatives were bid and they need to match up with what is required. It was hoped that the pump station would be installed and operational by the end of March. This would be pushing any vendor, but they will do their best. Pump stations have to be custom made for each installation. Doug feels the date we will be operational will be closer to the end of April. In addition to the pump, a wet well will be installed on the bank of the south side of the lake. The other portion of the project is the installation of a main line running from the north lake to the south lake. The City contractor (Wright Plumbing) will be working on that project. A bid has been put out for the materials. The old system will be operational until the new pump is on line. Doug reported that we will be real close to the budgeted amount. The pump station itself will be around $50,000, and the cost for the water line will run around $20,000. -- Tom White asked about the granite tee markers? Jerry stated these are similar to those at Indian Peaks Golf Course. We have requested bids for 45 or more tee markers, with each having the layout of the hole, par for the hole, etc. Part of the bid package is revenue sharing where the bidder can solicit advertising for the tee markers. This should involve no cost to the Golf Fund and we could get a percentage on an annual basis. -- Mary commented that the Board decided that because we did have a lot of input from community, that we set up early sessions to begin discussion of fees and charges for 1996. The voting tonight solidifies that we need to take a close look at our current fee structure. Jerry stated we would probably hold some public outreach meetings starting in June. Mary acknowledged that Mr. Scharf's material was very plausible in some ways. The Board should take some time to review these issues. As Board members, we are trying to do the best we can in reviewing the issues, developing policies that are the most equitable to golfers. She hates to have people misconstrue what the Board says and does. Golf Board Minutes February 15, 1995 Page 10 -- Frank Blanco asked if Mr. Scharf would put together a package showing the effect to revenues if prime time was eliminated. Henry requested that any information on fees be presented for discussion at future Golf Board meetings. -- Mindy Markley appreciates Mr. Scharf Is efforts. She has served on the Golf Board since July of this year and has been given a tremendous amount of data to review. It is quite obvious to her that previous Golf Board members and Jerry Brown have done a tremendous job in the past, and they have made these courses very workable and in budget. Further, the information she received convinces her that Jerry knows what he is doing. She views tonight not as a question of what was presented in preparing our budgets, but that things have changed and we should take other things into consideration when preparing future budgets. Dick Ward stated that the initial information he saw did not cause an interest or concern where he felt a need to attend previous Board meetings. However, he feels the approved increases for pass holders are very inequitable. -- Henry has been involved with the Golf Board for a long time. He became a Board member to make golf in Fort Collins as good as possible. The volunteer people serving on the Golf Board are trying to work to make Fort Collins' golf better. -- Joe Nance stated that tonight the Golf Board needed to make a decision. They were unable to do so because one of the board members had a perceived conflict of interest. It is ridiculous that someone appointed to serve on a board is excluded from a vote, rather than showing faith that the appointee will be straight forward and honest in their vote. Joe firmly believes that City Council should review that portion in the policy regarding appointments. ADJOURNMENT Tom White moved that the meeting be adjourned and Tom DeGrand seconded the motion. Motion Approved (9:0) and the meeting adjourned at 10:10 p.m. Respectfully submitted, Alyce Nierman, Secretary III Golf Division ATTACHMENT: Golf Board Minutes February 15, 1995 Page 11 Meeting Attendance izt�wf DI M1 _ i Henry Fry Frank Blanco Tom DeGrand Mary Hodge Armon Johannsen Mindy Markley Cindy Roper David Shands Tom White Jerry P. Brown Mike Powers Randy Bonneville Derek Cordova Jim Greer Joe Nance Alyce Nierman Suzanne Nance Dan Bruntz Doug Evans Stacy Neal GUESTS (NOTE• Some guests did not sign the attendance sheet.) Jim Allen Jack Mercer Ray Anderson Gary R. Miller Harold Asmus Dennis Nicks Steve Boettcher Cam Osler Robert Brose Bud Purath Ron Bruce Harvey R. Riley Bob Bures Mike Sawyer Buzz Bussell Carol Scharf Rick Chavez Louis Scharf Mark Crabtree Reuben Schneider Henry & Mrs. Cross Harold Syas Frank "Doc" Dille Roger Vanderslice Sean Duff Dick Ward Ed Faillace Glen Weaver Larry Giltz Hugh Winn Shane Houska Erhart Wolfe Mark Jackson Doug Wyffels J. D. Manning Cas Zajac Evan Meloney An Analysis of Annual Pass Fees in Ft. Collins, CO (Subtitle: Why a Passholder Sees Red Over Higher Greens Fees ...with apologies to the Coloradoan. ) Presentation to Golf Board Wednesday, February 15, 1995 Louis Scharf 1. Introduction 2. Criticisms of the Data and Its Analysis 3. Analysis of Patterns of Play 4. Conclusions and Recommendations 5. Appendix: Numbers and Curves 2. Criticisms of the Data and Its Analysis 2.1 Existing numbers do not have enough resolution to be useful for policymaking. That is, we do not know what type of golfer (Single, Sr., etc.) is playing what kind of round (9 or 18, prime or nonprime) 2.1 9-hole rounds and 18-hole rounds are analyzed equally in an analysis that badly underestimates the cost per round. 2.2 Singles ($400), Seniors ($300), Juniors ($200), Children ($100) are analyzed equally in a global analysis that averages out what we would like to know, namely who is paying what. 2.3 Stationary 5 year averages are used to predict future membership numbers during a nonstationary 5 year period over which per play fees have been increased 40% and may increase 1000/6. These predictions failed to predict a drop of 122 members in 1994, and they will likely fail to predict a drop in 1995. 2.4 Many of Mr. Brown's averages are wrong. Almost all are misleading. Some are so misleading that they cannot possibly describe any of the annual pass golfers we have in Ft. Collins. 2.5 The publicly stated increase of 12.2% that would accrue to the proposed fee increase is wrong. (Note: I do not say the books are cooked. I say the numbers are cooked.) Let's defend this criticism. 0 9 Assumptions: I have used raw data on revenues, 9 hole rounds, 18 hole rounds, etc. from Collindale and City Park Nine. This data was given to me by Mr. Brown. See the Appendix. I have taken Mr. Brown's calculation of average per play fees at face value, because I have no way of independently computing it. I have computed my own average rounds and average per play costs, because his computations are incorrect. The numbers I use are $1.40 per play fee (Mr. Brown's number) 46 rounds (Mr. Scharf s number) $7.60 per round (Mr. Scharfs number) There is no need to quibble over these values, because many of the points to be made are only weakly dependent on the exact values. But already you get the uncomfortable feeling that the 12.2% increase that has been claimed might not be correct. That is, if the per play fee is doubled to $2.80, then the per round fee becomes $9.00 and $9.00/$7.60 = 1.184, or 18.496. This number matches almost exactly the number I have computed by analyzing patterns of play. More on this later. Equations: We shall need only one equation for most of our analysis: (AP + PPF x NR)/NR = CPR AP: cost of annual pass PPF: per play fee NR. number of rounds CPR: cost per round This equation connects annual pass membership, per play fee, number of rounds, and cost per round. The Question of Rounds: From Mr. Brown's Statistics 9 9 9 9 9 9 9 9 ... 9 9 46 9 hole rounds 18 18 18 ... 18 18 15 18 hole rounds Mr. Brown: 61 9-hole rounds or 61 18-hole rounds. "The issue of the analysis of rounds of golf as only 18 hole rounds, or 9 hole rounds being treated as one-half rounds, is really immaterial in this discussion," Jan 18, 1995, Mr. Brown writing as Ms. Azari. Mr. Scharf. 76 9-hole rounds or 38 18-hole rounds. d d d d d d d ... d d 46 half notes 0 0 0 ...0 0 15 whole notes Mr. Brown's Logic: 61 half -notes or 61 whole -notes; measures in a musical score would have variable counts. Mr. Scharf: 76 half -notes or 38 whole -notes; measures in a musical score would have constant counts. 0000000...00 46 nickles 00000...00 15 dimes Mr. Brown's Logic: 61 nickles or 61 dimes : $3.05 or $6.10; ambiguous and incorrect Mr. Scharf- 76 nickles or 38 dimes : $3.80 or $3.80; unambiguous and correct Consequences of the Question of Rounds Mr. Brown: "Currently the average annual pass holder pays only $5.20 per round, ... ," Jan. 3, 1995, Mr. Brown writing as Ms. Azari. Mr. Scharf: I cannot reproduce Mr. Brown's number, even using his misunderstanding of nickles and dimes. But if we take his numbers at face value, the correct answer is $ 8.3 5 per round. Mr. Brown: 69% of annual pass revenues are generated from Collindale and 31% are generated from City Park Nine. Mr. Scharf. This estimate is based on the number of visits, not corrected for the 9-hole and 18-hole problem. It is incorrect. If you simply correct for the 9-hole and 18-hole problem you get 76% and 249/6, but you would have to have a more sophisticated analysis to get the correct answer. Let's say it another way: If Mr. Brown were a butcher, he would calculate the price per pound of meat by adding up the money in his cash register and dividing by the number of receipts. I would calculate it by adding up the money in the cash register and dividing by the pounds of meat sold. Item 194 Sng 275 Srs 106 Jrs Chd The Question of Fixed and Variable Costs Fixed Fee Per Play Rnds $400 $1.60 $300 $1.40 $200 $1.20 $100 $1.00 Mr. Brown: From the total revenue generated, and the total number of rounds, compute the average passholder cost per round, independently of whether the passholder is single or senior or junior. Mr. Scharf. Tell me how many rounds, of what type, are played by each class of golfer, and I will tell you the per play costs for that class. If you don't know these numbers I will use exact formulas to estimate them based on patterns of play. Item Capital Operating Miles 194 757s 275 747s 106 727s 737s $400 M $1.6 M per 100 K mi $300 M $1.4 M per 100 K mi $200 M $1.2 M per 100 K mi $100 M $1.0 M per 100 K mi Mr. Brown: Divide total capital cost plus total in -air cost by total number of miles flown to compute cost per mile to keep a plane in the air. Doesn't matter whether the plane is a 757 or a 737. Mr. Scharf. You tell me how many miles each class of aircraft flies and I will tell you what the per mile costs are for that class of aircraft. 0 • Consequences of the Question of Fixed and Variable Costs Mr. Brown: "Currently the average annual pass holder pays only $5.20 per round,...," Jan. 3, 1995, Mr. Brown writing as Ms. Azari. Note: The corrected value is $7.60 (my number) or $8.34 (Mr. Brown's number, corrected.) Mr. Scharf. Singles are paying about $10.29 per round at the global average of 46 rounds per year. Senior golfers are paying about $7.92 per round at the global average of 46 rounds per year. Junior golfers are paying about $5.74 per round at the global average of 46 rounds. With the proposed per play increases, these numbers go to $11.8% $9.32, and $7.14, with respective percentage increases of 15%, 17%, and 24%. Let's say it another way: If Mr. Brown were a butcher, he would incorrectly calculate his per pound costs, as illustrated previously, and then he would ignore the fact that some of the meat he sold is hamburger, some is flank, some is T-bone, and some is sirloin. I would separate my receipts and compute per pound costs for each type of meat. Further Illustrations and Criticisms To further illustrate how misleading Mr. Brown's global statistics are, let's apply them to our various golfers (Sr., Jr., etc.). Let's assume the per round cost of $ 7.60 and the average number of rounds of 46 describe each type of golfer and ask the question, "what per play fees would each type of golfer have to pay to have average per round costs and average rounds?" Answer: Sng ($400) -$1.09 Sr ($300) $1.06 Junior ($200) $3.20 Child ($100) $5.42 This is uncomfortable: None of the answers is $1.40... and the city would have to pay the single golfer $1.09 each time he teed it up ... not collect $1.00 to $2.00. It would have to ask the child golfer to pay $3.42 more than his parents think the primetime rate is! What is going on here? Well, consider a biologist who counts all of the bird legs in the world and divides by the number of birds to find that the average bird has 2 legs. This is a good statistic because every bird in the world shares a common characteristic, namely 2 legs. But suppose the biologist adds up all of the beak lengths in the world and divides by the number of birds to find that the average bird has a 1.75" beak. This number badly overestimates the beak length of hummingbirds and badly underestimates the beak length of pelicans. Mr. Brown can count our legs and divide by the number of us to find that we have 2 legs, but he cannot count our dollars and divide by the number of us to get average costs. He has the same problem as the biologist: our variable costs are the birds' variable beaks. Maybe we should analyze some typical playing patterns to try to understand what is really going on. 3. Analysis of Patterns of Play 3.1 The Methodolgy 3.2 Mr. Brown's Prototype 3.3 Mr. Scharf s Single Prototype 3.4 Mr. Scharf s Senior Prototype 3.5 Mt. Scharf Junior Prototype Methodolgy: Compute exact costs based on representative playing patterns. We have no alternative, because we have no data which resolves rounds into 9 vs 18, prime vs nonprime, and single vs senior vs junior, and so on. This is illustrated in the following diagrams. i n I r - IT 4 I8 4 196 WT ?T `t A'T'`m,Rt4 of 'PLC!'. 4 I 9 NpT - 4ITT TT PT VPF = 87 N l.90 ) I- PT(:.e) 1 r Ig o.5o i r,oe le,00 IS �� NOT pIr No Text - `I l' --- .00. - - -- - 4 14 `t'AT`TE t2N OF /kY_ . • COSTS NpT 0�r 1.0e 1.06 t.bo NDT 'PT 3.4 K - PT --- .----- �.d0. Z.�u - - 2.►v T.Do pI- COS"('S NET �.�K aTT 0.5o I.oe 1.06 t.ac NOT .PT - �• _ - --- - .ao Z.Co 2•0 ,po P-F- 01 lo,00 NOT . PT . . . . . . _. _rqs rokr - toff, I.�: '0 1.06 t.bo.. N?T I,00- Z,00 ----- 2.�0 '�.00 `pr .o. I�..o WT.. I�tPT lo.00 ISe� 'PT -- ._ . . . . . . _ . . l3_.,o NPT {l}o/ —.1— k -- - _— - l yAr �q -- - - - - -------- ----- - - _ - - -T-o - DPP F �je 111A'�' �tP - r-T�--_- •_-•-rTY_i r � _ _ •_ I have analyzed playing patterns which will exactly reproduce Mr. Brown's revenue figures of $202125 and his total rounds 26609. They match his per play fees of $1.40: Average Number of Rounds Sng Sr Jr % incr w dbl PPF 1. 30 60 34 21% 2. 40 50 45 19% ($11.60) ($7.40) ($4.53) 3. 50 50 24 23% ($9.60) ($7.40) ($7.45) 4. 60 40 36 23% The minimum % increase I have yet produced from doubled per play fees is 19%. This matches, almost exactly, the 18.40/6 that I estimated earlier, thus validating my numerical analysis and my analysis of playing patterns. Now there is no escape: working, taxpaying singles are playing at about a 20% discount while the Choice City provides safe, healthy, affordable recreation for its nonworking seniors (who have payed their taxes), juniors, and children (who will pay their taxes). I call this inspired public policy. I am concerned that Mr. Brown would propose a change in this policy and I am concerned that the board would endorse his proposal. The Question of % Increases: One More Time The % increase is on the order of 19%. What about the 12.2% claimed? Mr. Brown estimates that the doubling of per play fees will produce an average of $106 in per play costs for each passholder in '95, twice the $53 that he estimates was spent in '94. These numbers are contained in his Jan. 18, 1995 letter to me. If his estimate of a 12.2% increase in passholder costs is accurate, then (APA + 106)/(APA + 53) = 1.122 ... 12.2% where APA is the average cost of an annual pass. Let's solve for average cost of an annual pass: APA = $381 This is impossible. If 175 singles have $400 passes, then the remaining 400 pass holders would have to average $372 and none of these 400 pays more than $300! Our numerical analysis says 18.4% and our analysis or patterns of play says 19%. Mr. Brown's 12.2% says the average annual pass costs $381. We conclude that the claimed 12.2% increase cannot be correct. 4. Conclusions and Recommendations 4.1 Numbers have low resolution; statistics are misleading, largely irrelevant, and unsuitable for informed policymaking. The percentage increase is not the 12.2% that has been claimed in Mr. Brown's (Ms. Azari's?) Jan.3 letter to Mr. Scharf. 4.2 The picture that has emerged to date is distorted. But it supports Mr. Brown's disenchantment with the annual pass system and with the annual passholder. 4.3 The prediction for numbers of annual passes is naive: it did not predict the last steep decline in passes and it will not predict the next. 4.4 A subset of Seniors, and probably most Juniors, have low per play costs. (This is good.) So Singles have hell to pay. (This is bad.) 4.5 Here is the dynamic: Average costs are low, so fees are raised. This drives up the breakeven point for pass holders, drives out moderate volume players, and leaves only large volume players. This drives average costs down even further, producing another fee hike. This drives the breakeven point even higher, drives out the high volume users, leaving only the very high volume users. This drives average costs down even further, produces yet another fee increase, and so on until the breakeven point on annual pass fees is so high that no one buys them. 4.6 You might balance the budget with the proposed doubling of per play fees. But in the bargain, you will decrease play, you will make golf less accessible to Juniors and Seniors, and you will drive off a community of gentlemen and gentlewomen who have supported the growth of a civilized golf culture in Ft. Collins. You will cripple, if not eliminate, the annual pass system, even though when Mr. Brown writes as Ms. Azari on Jan. 3, 1995 he or she says..." It is not the philosophy of the Council or the Golf Board to eliminate annual passes, but to move in the direction to have annual pass players pay a more fair and equitable share of the costs." (Mr. Brown has pointed out to Mr. Scharf that the quote above does not include the Golf Director and that his own intention is to eliminate annual passes.) 4.8 Our criticism shows that Mr. Brown (Ms. Azari?) has no idea who will be hit how hard by the proposed fee increases, and therefore he (she?) cannot possibly know whether the proposed policies are producing a more fair and equitable sharing of costs. And when have we had a public airing of what is fair and equitable, based on useful numbers? 4.9 If you really wanted to raise average costs to the annual passholder you would have to decrease the cost of an annual pass to attract low volume single users whose high per round costs would actually increase the average cost. This illustrates that you are working toward the wrong goal. The correct goal is not to increase average costs to the pass holder, but to minimize the costs, under the constraint that you raise enough money to balance the budget. This is an interesting problem. I urge you to freeze annual pass fees at their 1994 levels and to rethink the true economic and social impact of per play fees. I appeal to someone on the board to so move. S. Appendix: Numbers and Curves 2,5 3311 % h/ 3zo 000 1 Luc°': II IA 4r �OwLiJ/14L, Tn u,/aAP e4 k GerAr 51 ��79v ►3914LL I N!, 5-73 &oe^c--4t LS) (4-3) _ 79 L�..J WA) z3 j lJ /1.LS7 /2`IL-c-,, �W eAk U-J,_ VIA, LAjj Lz�Sg �- f�29v IL Goy Gil(.✓ �, r�/ C„1 ✓J '�o�o s7J # UU_ISr� S%j17" TLS37 LS-L� -74 31K7 Iv33 o- IF �,�, I��q1 IbLN (39> rW c S33Sz� 12, 3P 1 rc _ 13,7L il9 6q� lases. _ r Yl3I'S S75 \ jbD \ I_s 5✓ 4g'' �sg ,,-4 3<0 11� i' ix S Pik Ir,230.L5 Lao zbl IDo I•oo 9� to j PT/APT Y.a�—.