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07-06-2011 VC B WS-MMINUTES OF THE BUDGET WORKSHOP SESSION • VILLAGE COUNCIL OF NORTH PALM BEACH, FLORIDA JULY 6, 2011 Present: David B. Norris, Vice Mayor William L. Manuel, President Pro Tem T.R. Hernacki, P.E., Councilman Robert A. Gebbia, Councilman Jimmy Knight, Village Manager Melissa Teal, CMC, Village Clerk Absent Darryl C. Aubrey, Sc.D., Mayor ROLL CALL Vice Mayor Norris called the meeting to order at 7:00 p.m. All members of Council were present, except Mayor Aubrey, who was out of town. All members of staff were present, except the Village Attorney. Incoming Village Manager James Titcomb, Finance Director Samia Janjua, Head Golf Professional Lee Stroever, First Assistant Golf Pro Casey Mitchell, Food and Beverage Director Keith Riolino, and. Community Development Director Chuck Huff were present. The purpose of the meeting was to review the Country Club Budget for FY 2012. Mr. Knight noted the various publications in which the North Palm Beach Country Club received accolades this year, which included Golf.com/Golf Magazine and AAA.com. CURRENT FINANCIAL CONDITIONS Mr. Knight reviewed golf course memberships and rounds played, as well as the year-to-date summary of revenues and expenses. Mr. Knight gave a comparison of the budgeted revenue versus revenue received as of 6/30/2011. Mr. Knight reviewed areas of reduced expenses as well as expenditures to be made before the end of the fiscal year. • Unrestricted Fund balance $403,261 as of 9/30/2010 • FY 2011 Driving Range proceeds $173,149 as of 7/1/2011; $32,554 increase over prior year • Village Tavern Restaurant YTD shortfall of $103,484, with $21,453 in inventory on hand • Country Club revenues exceed expenses by $480,429 as of 7/1/2011 • FY 2011 remaining Country Club contingency $180,699 • FY 2009-2010 Unrestricted Net Assets = $403,261 FY 2012 BUDGETARY ASSUMPTIONS Mr. Knight distributed a list of assumptions used in preparing the Country Club Budget and General Fund Budget, which included projected costs for utilities and employee benefits, as well • as the estimated decrease in the taxable value of properties in the Village. Minutes of Village Council Budget Workshop Session held July 6, 2011 Page 2 of 3 FY 2012 COUNTRY CLUB BUDGET • Mr. Knight detailed expenses by department and function. Mr. Knight explained the Enterprise Fund is comprised of three operating divisions: golf, food and beverage, and administration. Discussion took place regazding determining the amount of contingency (profit) and major factors which affect reaching the projected figure. • combined Administration, Gold and Food and Beverage expenses total $3,693,868, a decrease of 4.83% or $187,405 from FY 2011 • Administration expenses total $353,433, a decrease of 18.6% or $80,580 from FY 2011 • Golf expenses total $2,699,552, an increase of .15% or $4,141 over FY 2011 • Food and Beverage expenses total $847,710, a decrease of 9% or $84,838 from FY 2011 • contingency projected at $206,827 • personnel expenses total $915,235 • operating expenses total $2,292,932 or 59% of the budget CAPITAL EXPENDITURES • capital expenses total $15,500 for a portable golf launch monitor Discussion was held regazding potential capital improvement projects, such as expanding the golf shop or adding portable shade barriers for the driving range. Mr. Knight recommended that any extra funds be used to pay down the loan for renovation of the golf course and that Council then consider a loan to construct a new clubhouse. Mr. Knight noted that accounting changes in capitalization thresholds mean that some repair and maintenance items aze now carried as operating expenses instead of capital expenses. 2011-2012 MARKETING PLAN Mr. Knight distributed and reviewed the 2011-2012 Mazketing Plan for the golf course. PERSONNEL CHANGES • overall reduction of 2 full-time positions and 8 part-time positions • title change from Director of Golf Operations to Head Golf Professional • title change from Assistant Golf Pro to First Assistant Golf Pro • 1 full-time Administrative Assistant position deleted • 1 part-time Member Relations Coordinator added • 1 part-time Sales and Mazketing Rep position added • change from Restaurant Event Coordinator to Restaurant Sales Coordinator • Head Chef position deleted; Sous Chef position deleted • Chef position added • 5 part-time Line Cook positions added • • 15 Server and Bartender positions combined as Service Personnel positions • 6 part-time Snack Baz Attendant positions added Minutes of Village Council Budget Workshop Session held July 6, 2011 Page 3 of 3 • COMPENSATION OVERVIEW • zero market adjustment or cost-of-living adjustment • merit increase budgeted at 3.75%average • 19.57% defined benefit pension contribution by Village, and 6% employee contribution • 15% defined contribution pension plan mandatory for all newly hired non-union eligible employees • 6.87%health and dental insurance increase anticipated =$566 increase in CC budget DEBT SERVICE • debt service expense for FY 2012 totals $470,201 • golf course renovation loan expires in 2024;principal outstanding on 9/30/2010 was$4,072,544 • golf cart capital lease expires in 2013; principal outstanding on 9/30/2010 was $235,176 REVENUES • FY 2012 revenues total $3,900,695 • Cart Rental and Walking Fees = $1,061,380 or 27.21% • Food and Beverage= $847,710 or 21.73% • Greens Fees = $836,500 or 21.44% • Membership = $664,970 or 17.05% • Driving Range= $197,380 or 5.06% Mr. Knight explained how revenue projections for FY 2012 were determined. Mr. Knight reviewed the Food and Beverage operation, and noted new hours and a new menu for the restaurant. Mr. Knight reported that FY 2012 Food and Beverage revenue and expenses are identical; the restaurant is being treated as a Club amenity. GOLF CLUB MEMBERSHIPS AND RATES Mr. Knight reviewed membership privileges, and noted that handicapped services ($25 value) have been added; however, the 10% discount for in-restaurant dining has been discontinued. Mr. Knight noted there have been no changes to the membership fees, which remain at FY 2011 prices, although the early pay discount has been discontinued. During discussion of membership categories and fees, Mr. Knight suggested that in future, Council might wish to consider a single membership category for both residents and non-residents, with a 15% discount to North Palm Beach residents. Mr. Knight reviewed walk-in rates and advised that greens fees have been expanded to six published time periods or seasons during the year, with the fee schedule incorporating both greens fees and cart rental. ADJOURNMENT With no further business to come before the Council, the meeting adjourned at 9:00 p.m. • / L or w4 e- Melissa Teal, CMC, Village Clerk