REPORT TO COUNCIL
SUBJECT
Title
Approve Budget Modification No. 44 in the Amount of $140,000 to Cover Projected Deficits in the Golf and Tennis Operations Fund for FY 2014/15
Report
BACKGROUND
In 2011, Council approved the dissolution of the Community Recreation Fund and the creation of the Golf and Tennis Operations Fund. The newly configured Fund was first presented in the FY 2012/13 Budget. The intent was for golf and tennis operations to operate as a self-supporting enterprise fund. In FY 2012/13 Council approved a budget modification of $300,000 to stabilize the Golf and Tennis Fund after the previous restaurant operator terminated its operations at both golf courses.
In December 2014, the new restaurant operator was required to cease services at both golf courses due to failure to pay rent. This resulted in both a revenue loss from rental income and reduced rounds of play at both courses. Due to the revenue loss, the Golf and Tennis Operations Fund is projected to finish FY 2014/15 with a deficit of approximately $140,000. Therefore, a $140,000 transfer from the General Fund is needed to balance the Fund through FY 2014/15. Proposals to operate the two restaurants have been reviewed. Negotiations with the selected operators have started and it is anticipated that new license agreements will be brought to Council for approval by summer of this year. The difficulty in attracting and retaining qualified restaurant operators can be attributed to the design and condition of the existing facilities. The buildings are over 40 years old and apart from the addition of a banquet room over 20 years ago at the Sunnyvale Golf Course, very few capital improvements have been made to modernize the facility. In the early 90's and 2000's the golf program generated between one to three million in profit, however those funds were not reinvested back into the facility and were used for other recreational programs. While the City is fortunate to have operators in...
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