Bunker HIll Golf Course changeCITY OF DUBUQUE, IOWA
MEMORANDUM
December 28, 2000
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Bunker Hill Golf Course Operation
Leisure Services Manager Gil Spence is recommending a change in the operational structure at
Bunker Hill Golf Course. This would change the Golf Pro from a contract position to a City
employee. The Golf Pro and the Park and Recreation Commission are supportive of this change.
The City will show a minimum of a $25,868 profit and have greater control of the staff and
operation procedures of the pro shop and the snack bar, including the new $339,000 addition.
This will be presented as part of the FY 2002 budget presentation, but needs consideration now
so the change can be implemented at the beginning of the 2001 golf season.
I concur with the recommendation and respectfully request Mayor and City Council approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Tim Moerman, Assistant City Manager
Gil D. Spence, Leisure Services Manager
CITY OF DUBUQUE, IOWA
MEMORANDUM
December 28, 2000
TO: Michael C. Van Milligen, City Manager
FROM: Gil D. Spence, Leisure Services Manage~
SUBJECT: Bunker Hill Golf Course Operation
INTRODUCTION
The purpose of this memorandum is to request City Council approval to change the
management arrangement of the Bunker Hill Golf Course from the golf professional to
the City.
BACKGROUND
The present contract with the golf professional calls for the City to pay the pro a salary
of $11,900 plus the pro is allowed to operate the pro shop, concession area, golf carts,
and give golf lessons. The pro returns to the City ten percent of the gross sales from
the concession and golf cart operation, which is around $23,000. All of the major
equipment in the concession area is provided by the City and all utilities are paid by the
city.
We have used this same basic agreement with the golf pro for almost twenty years.
When we started, the commission returned to the City was estimated at $1,000 on total
concession and golf cart sales of $10,000. Over the years that business has grown to
where sales are now over $200,000.
DISCUSSION
As we prepared to renovate the concession area of the Bunker Hill building, I thought
we should review the agreement we have with the golf professional to determine if the
City should take over responsibility of the operation. We hope these improvements
increase the business in the snack bar, and it seemed a logical time for the City to take
control of this revenue source.
more
golf course operations, page two
I asked for two members of the Park and Recreation Advisory Commission to join
Recreation Division Manager Pat Prevenas and myself to review the agreement. Mark
Sullivan and Gary Harjehausen volunteered to join us. Through the study process,
budget estimates were made to determine if there would be a financial benefit to the
City. When it was determined there was a financial benefit, discussions were held with
the golf professional for his input and reaction. The golf pro supported the change so
the committee moved to development of a more accurate budget estimate.
The attached Golf Operations Budget has been submitted to the City Manager for
consideration in the Fiscal Year 2002 budget process. This budget will be discussed in
more detail dudng our budget hearing and approval given at the appropriate time. 1 am
asking for City Council approval of changing the management agreement at this time to
allow us ample time to make the necessary arrangements prior to the golf course
opening around March 1st.
As you can see from the budget, a profit of $25,868 is projected. You may wonder why
I am recommending this operational change where we will realize a profit of $25,868
when the golf pro now pays the City a commission of $23,000. The following points will
explain this:
When the present salary of $11,900 is subtracted from the $23,000 commission,
the net for the City is $11,000.
· The golf maintenance budget for FY 2002 shows a profit of $18,831. When
operation and maintenance budgets are combined the total profit is $44,699.
The maintenance budget is able to show this profit partly because the operation
budget has assumed some expenses that had been charged to maintenance.
· I believe the FY 2002 estimate is conservative. I have tried to make expense
projections on the high side and revenue projections in the middle of the road.
· The budget estimate does not include expense, revenue, and profit from use of
the building for private parties during the off-season.
The Park and Recreation Advisory Commission approved the change and recommends
City Council approval. Not only will there be a financial benefit to the City, the City will
have greater control of the staff and operational procedures of the pro shop and snack
bar. More and more public golf courses are changing to full management by the City
because of the revenue potential involved.
ACTION STEP
The action requested is that the City Council approve changing the management
arrangement of the Bunker Hill Golf Course from the golf professional to the City.
GDS:et
attachment
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61030
61050
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62010
62011
62030
62190
62130
62140
62230
62247
62340
62411
62412
62418
62421
62431
62443
62511
62611
62642
62643
62644
62664
62666
62670
62671
62731
62747
GOLF OPERATIONS
Seasonal employees
Overtime
IPERS ($23,990 x 5.75%)
Social secudty ($55,960 x 7.65%)
Worker's comp
TOTAL WAGES
Office supplies
Uniform purchase/maintenance
Postage and shipping
Dues and memberships
Legal notices and ads
Promotion
Sales tax ($320,000 x 6%)
Dram shop insurance
Mileage/local transportation
Electric (50% of $2,327)
Gas (50% of $1,544)
Refuse (50% of $1,000)
Telephone (50% of $1,800)
Property maintenance
General liability (50% of $1,986)
Fuel
Mach/equipment maintenance
Food products
Beer products
Liquor products
License fees
Credit card charges
Pro shop merchandise
Miscellaneous operating supplies
Miscellaneous services
Machinery/equipment rental
TOTAL SUPPLIES AND SERVICES
TOTAL BUDGET
$ 55,960
1,379
4,281
75O
$ 500
700
250
500
25O
3,000
19,200
2,204
250
1,164
772
500
900
2,000
992
2,000
2,000
20,000
32,000
5,000
2,450
2,130
50,000
5,000
55,000
23.000
revised 10/26/00
$ 62,370
$ 231.762
$ 294,132
REVENUE ESTIMATES:
Pro shop sales
Cart rental
Concessions
$ 75,000
115,000
130.000
$ 320,000
PROFIT
$ 320,000
294.132
$ +25,868