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HomeMy WebLinkAboutParks & Recreation (Wailua Golf Course) FY2013-2014 DEPARTMENTAL BUDGET CALL-BACKS April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 1 The departmental budget call-backs reconvened on April 18, 2013 at 2:45 p.m., and proceeded as follows: Parks & Recreation (Wailua Golf Course) Honorable Gary L. Hooser Honorable Ross Kagawa Honorable Nadine K. Nakamura Honorable Mel Rapozo Honorable JoAnn A. Yukimura Honorable Jay Furfaro Excused: Honorable Tim Bynum Chair Furfaro: Okay, we are back. Our next Council agenda item for CIP will deal with the strategies associated with investments as it relates to the Golf Course and the Golf Course concessions. And before we start, Alan I have got you signed up to speak and I will let you speak before we start. You have six minutes. I will give you a head's up at the halfway mark and you can continue from there. Make sure he has got the microphone. ALAN TADA: My name is Alan Tada, representing the Thursday Hui Corporation who is the Wailua Golf Course/Golf Cart Concession. This will be our second term for doing the carts. Wailua Golf Course is right now considered to be the best golf course on Kaua`i. It is a hidden gem for all of these non-resident players. And our appreciation totally goes out to Baron Nakamatsu, Craig Carney, Richard Rapozo, and the crew for their efforts in the organizing and upkeep of this fabulous golf course. Currently we are averaging only $37,000 a month. Our projection should have been $40,000. So we are doing about a $3,000 a month loss. And looking at from 2010 to now, there seems to be a steady drop of 30% from the last three years. Part of the problem is since we started this first...the second contract back in December of 2011, the restaurant has been closed since. Because of that, we lose another 10-15% of people that might want to play at the Course. Not only that, we lose a lot of fundraiser tournaments. For example, Wailua Golf Course, if you are doing a fundraiser event and charging $100 a piece and you play at Po`ipu Bay, they charge $60. $60 goes to the course, $20 goes to the buffet and the food and they pocket $20. Wailua Golf Course, all they have to pay is $10 for the cart and most of the people, the registrants for the tournament have monthly cards. So $10 is what they pay, $20 for the food, and they pocket $70. They would want to play Wailua more than any other course to make money. But because we do not have a facility to have the awards banquet, we lose that. Now as of April 1st, the Pro Shop has closed. The main problem was that we kind of solved with Ian and Steve Hunt as I was worried about the rental of the clubs for the non-residents. Without the clubs, you cannot play. You cannot play, you cannot rent my carts. We are slowly doing a solution to that problem. But you know, with the Pro Shop closed, if you need balls, if you need gloves, tees, anything, there is nothing there. I mean it is sort of like a ghost town. Chair Furfaro: First three minutes. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 2 Mr. Tada: Okay. We are requesting a reduction in our Contract No. 8560 from $12,000 to $9,000 a month, or a possible increase of the cart rental from $2 for night 18 holes, $2 more to $20 from $18 and from $10 to $11 for the nine-hole cart rental. This would kind of adjust the $3,000 deficit that we are encountering. Business is tough these days. As can you see the restaurant never opened and whoever went there always closed and the Pro Shop, they do not make money at all. If they have the possible driving range, they would have a chance. But with the facility you still have to get the people to get the balls. So that is another problem. The bottom line, without any or either of these adjustments, we cannot exist. Right now if this goes on for the next three years we are losing $138,000. If I pull out now, and sell the carts, I still can get $4,000 per cart and I will lose $80,000. But I would rather lose $80,000 than $140,000 in three years. Thank you very much. Chair Furfaro: Before I recognize Mr. Rapozo, I just want to ask you a couple quick questions. What is your total inventory of your carts? How many carts do you have? Mr. Tada: We have 80 brand-new Club Carts, 19 used/refurbished Yamaha that I promised the County. That is another thing to, refurbish that thing it cost us $40,000. They went way over budget. Chair Furfaro: For refurbishment of the 19? Mr. Tada: Yes. And then one of the ADA carts. Chair Furfaro: You have one ADA cart? And your carts are on a lease? Mr. Tada: The 80 is on a lease right now. Chair Furfaro: And let me ask, so that I am very clear in this consideration you are either asking us to reduce the monthly rental from $12,000 to $9,000? Mr. Tada: Yes. Chair Furfaro: Or individual cart rental from $18 to $20? Mr. Tada: For 18 holes, from $10 to $11 for nine holes. Currently if you rent a cart on any course on Kaua`i you are paying $25 per person on a cart That is $50 a cart. Chair Furfaro: Now the part that is not real clear to me, should we resolve getting a new operator for the Pro Shop, getting a restaurant open for prime daytime hours, are you open to going back to your original contract? Mr. Tada: Yes. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 3 Chair Furfaro: That is all I needed to hear. Mr. Rapozo, have you the floor. Mr. Rapozo: Thank you, Mr. Chair. I had a question and I think you might have answered it about the fees. If you went up, would that impact the player...the number of rounds in your opinion? Mr. Tada: Not for $2. Mr. Rapozo: You do not think so? Mr. Tada: No. They did get a deal playing Wailua. Mr. Rapozo: It is the best deal in town, no doubt. If you are allowed to raise your fees $1 for nine and $2 for 18, that will balance your books? Mr. Tada: Yes, that will make up $3,000 more we can collect a month on the basic monthly rental. Right now it averages 70 carts a day. You are talking about 2,010 carts a month. Mr. Rapozo: I guess my concern is if you look at the charts, the number of rounds continuing to decrease. Mr. Tada: Go down and decrease. Mr. Rapozo: I think we have definitely got to be flexible with your contract, because we need the carts or that golf course is really going to be in trouble. It is already in trouble. Mr. Tada: Everything is like a domino effect. Mr. Rapozo: That is my point. And I hate raising fees, but I would much rather...and then it becomes a user fee, right? The people that use it will pay you and not the taxpayers subsidizing further with a reduction in your lease. I want to make sure Alan that number is going to be sufficient and considering the constant downturn of rounds played has your rentals been consistent? Mr. Tada: No. Mr. Rapozo: Is it going down as well? Mr. Tada: It is up-and-down, but the average is below what we projected, yes. Mr. Rapozo: So the $1 and $2 in your opinion should be sufficient? April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 4 Mr. Tada: Yes. Mr. Rapozo: Thank you very much. Thank you, Mr. Chair. Chair Furfaro: Alan, I have a tendency to think differently than Mr. Rapozo and I speak from the standpoint I was the General Manager of Molokai and the Golf Course at Wailua, I was at Princeville and I think an amendment that allows you to have a lower base rate during the period until all the amenities come back is more attractive and the reason I say that, the urgency is there. We do not have a banquet room. We do not have a restaurant. We do not have a Pro Shop,but every time we add something there we hope it is resulting in more rounds, but if it does not, we do not have to keep coming back to this problem and hopefully, we can find some short-term solutions. By saying to you, that we are going to $9,000. I just want to throw that out because I see the need. Without those amenities, we do not have a competitive golf course. Mr. Tada: Exactly. Chair Furfaro: Flat out. Mr. Tada: And on the other hand too we still have to watch the averages, even with the restaurant and the Pro Shop open to come up sufficiently so that adjustment will not go back up again. Chair Furfaro: I just wanted to tell you, I might be...I understand the urgency, but I might be approaching it from the other side of the problem than Mr. Rapozo. Mr. Tada: Right. Chair Furfaro: But we really appreciate your testimony, and we will see if we have a few more questions, but then we will get in with the Administration. Councilmember Nakamura. Ms. Nakamura: Thank you very much for the information and numbers that you presented. It is good to have this background. You were talking about fundraising tournaments, I am not a golfer, but at your banquet, were banquets ever held? Mr. Tada: Right outside of the restaurant and if needed they would put up tents. So we have more table space and stuff. Ms. Nakamura: And the restaurant would provide the food? Mr. Tada: Yes. Ms. Nakamura: And about typically how many people show up at the banquet? April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 5 Mr. Tada: I ran the biggest tournament on Kaua`i. We incorporated 180 players. So we take all the 100 carts, the fleet of carts, but being that I am the Chair, I still hold them at Wailua. We have to go to the Convention Hall to service all of these people for the banquet and awards. This could all come back to the restaurant and into our system and everybody is a winner. And like I said, it is basically all tournaments are $20-25 for the buffet style, per person. Ms. Nakamura: Right. Mr. Tada: But we lose so much of that. Ms. Nakamura: Thank you very much. Mr. Tada: Thank you. Chair Furfaro: Mr. Kagawa, you have the floor. Mr. Kagawa: Thank you for your testimony, Alan. I want to thank you for keeping me humble, because you beat me all the time on that course. But your company is worth my loss and I really appreciate it. Mr. Tada: Thank you. Mr. Kagawa: Seriously, I am looking at the numbers from July, 2012 and it shows about $40,000 and I know that I do not need to really see the numbers currently, because as a regular player, I see how empty the Course is and how empty the range is and everything. I totally agree that we need to do something now or else we will lose the golf cart and the Course will be history. So thank you for hanging in there during these tough times and hopefully we can get you some relief as soon as possible. Mr. Tada: I appreciate it, brother. Mr. Kagawa: Thank you. Mr. Tada: Thanks. Chair Furfaro: Okay. I want to personally thank you for the testimony. In three weeks, I will be celebrating my 40th wedding anniversary at Wailua fairway utilizing the catering services with a tent on the lawn and it was quite attractive. Mr. Tada: And we could help you with the flowers too. Chair Furfaro: A good time was had by all. Thank you, Alan. Mr. Tada: Aloha. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 6 Chair Furfaro: We have nobody else signed up? Okay. Can I ask the Administration to come up, please? Yes. Mr. Kagawa: Mr. Chair, real quick. I want to make sure that we save enough time, if we can for questions and I would prefer if...I do not know how long the presentation was, but I think we are kind of familiar with the main two problems is the two missing concessions, and we actually have some guests in the back that are interested in bidding. However, they want to see the golf balls — the range balls attached to the Pro Shop and maybe we can make sure that we address that. Thank you. Chair Furfaro: Yes? DANIEL FABIAN: I am sorry...can I make one quick comment? Chair Furfaro: I will tell you what I will do, I will call you up if you give me your name. Mr. Fabian: Daniel. Chair Furfaro: Daniel, come up to the microphone. You have six minutes. Mr. Fabian: I just have a very quick comment. Chair Furfaro: Go ahead. Mr. Fabian: Hi. Just a quick comment especially for the ones that do not play golf at Wailua. Mr. Rapozo: Sir, you need to state your name. Mr. Fabian: Hi, my name is Daniel Fabian. For the people who do not play regularly at Wailua, there is no way to play or pay for your round using a credit card or debit card. Chair Furfaro: We understand. Mr. Fabian: Oh, okay. I do not know how many time I have stood there and had tourists come up, I am ready to play oh, you only take cash and they look around for the ATM and roll their g and an eyes go, okay I can use play credit card and Y p Y twice, as much at a resort and they leave and the same thing when I hear the people working there when they answer the phone. They say it is only cash or credit and they strike the tee time away, because the person says I would rather pay with a credit card and if you are aware of that. Okay. It is a way to increase your rounds April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 7 Chair Furfaro: Not only are we aware of it, it is almost to the point that it is a breaking point to the way we are supposed to do business. Mr. Fabian, your comments have been received. Mr. Fabian: Thank you. Because I do not want to see the Golf Course go down in any way, because it is wonderful. Everybody does a great job in keeping it in tip-top shape. Chair Furfaro: Nor do we and this particulate is about investment in CIP, and so forth, so we can have a successful Golf Course. Somebody might have a question? Do you have a question, Mel? q Y q Mr. Rapozo: Various Councils have been asking for the credit card ability for many, many years, but it is an Administrative decision, not a Council decision. But they understand what the Council would like to see over there. But thank you...because maybe hearing it from you, maybe it will change their mind. Mr. Fabian: Thank you for your time. Chair Furfaro: Administration, are you going to come up and make a presentation? IAN COSTA, Deputy Director of Parks & Recreation: Aloha Councilmembers. Deputy Director Ian Costa. Deputy Director of the Department of Parks and Recreation. I guess first of all I wanted to orient you to the handouts that I provided. First on the top is the graphic set of charts. Secondly, and I believe I transmitted this previously, but there is a series of revenue summaries labeled"2013." There is one for 2012 and one for 2011 and these serve as the basis for the graphic charts. At the end of the graphic charts, there are two pages, I believe 11 and 12. Those are timelines for the concession reinstatement of the concessions. And then I do have one other attachment and that is a web article just kind of elaborating the benefits of a golf course in serving to receive runoff, as well as receive sewer effluent, which the Wailua Golf Course receives up to 500,000 gallons a day and if not for receiving it, it would go via the outflow into the ocean. II, Chair Furfaro: Excuse me. So the point you are trying to make with that? Mr. Costa: That we also help. Chair Furfaro: About the effluent? Mr. Costa: That we help the nearby sewage plant in getting rid of their effluent, versus sending it to the outflow. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 8 Chair Furfaro: I think you need to know, there was a study done several years ago about the Wastewater Treatment Plant at the Hilton sending the County R-2 water for irrigation. So I do not understand what you are quite comparing there. Mr. Costa: I am sorry, what is your point? Chair Furfaro: The point is the cost of irrigation over at the Wailua Golf Course. Mr. Costa: As far as the Hilton sending? Chair Furfaro: Yes, I mean there was an offer made. But do we not use the effluent from Lydgate to help with irrigation? Mr. Costa: That is the primary irrigation for Wailua Golf Course. Chair Furfaro: It has a dual benefit from an operational standpoint. Mr. Costa: That also helps us by not having to run our pumps to draw well water. Chair Furfaro: I wanted to make it clear. Thank you. Mr. Costa: The first graphic chart I did goes back to 2006. It really just shows the various, by category, the various golf fee revenues. Nationwide I believe there is a decline from golf from 2000...roughly 10% per year nationwide, I believe. In other words, just less people taking up the game and playing golf. So the second and then also plotting on that first chart is the date at which fees were increased on July 1St 2009 and then subsequently decreased in June of 2010. You can see a little spike there, which was caused by the increase in the fees. What you also can notice there, and you will on subsequent golf fee revenue graphics is basically the seniors, as well as the residents provide a fairly steady amount of play throughout the years and throughout the months. So I am going now to the next. 2011 fiscal year, golf fee revenue, and the reason I broke this year up separately is I begin to get more detailed... monthly reports whereas prior to that I was not able to get monthly reports, but yearly summaries and I believe I did include that in the last sheet, which looks something like this. So that is why I extrapolated this information to create that chart. Fiscal year 2011 golf fee revenue summary, the top line is the total revenue. But you can see that and it is almost typical of every year, where we see a spike starting in January through March. That apparently is our visitor count increase or what we also term "snowbirds." It is almost common every year. As you can see the green resident play remains fairly steady. There is a decrease throughout that year. It is like roughly 20,000 or so. Then the next chart I have, which is AMIE April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 9 page 3, provides a breakdown of that golf fee revenue. I am sorry, golf rounds played. No, wait, I am sorry. Do you have a page 2? Ms Yukimura: Yes, "golf fee revenue summary." Mr. Costa: Page 3 shows the various breakdowns as far as the rounds played. More than 50%...57% by resident play. The seniors provided about 17% of that play. The super seniors about 9% and the non-residents roughly 14% and juniors, 3%. That is just on the number of rounds and the people occupying the course. Chair Furfaro: Ian, you do not have anything here that shows the dollars as it relates to market share. I mean, if you were in banking, you can show us as many rounds as you want, but if there is no revenue to take to the bank, it does not mean anything to us. This is the chart that I provided to you folks. So if you have got 57% of resident play, I want to know what is 57% of the revenue is equal to? I am sorry, the rounds are equal to. So if you do this will you go 57% of the rounds are residents. Which is a substantial amount, but revenue is less than $10,000. 57% of our play is equal to only $10,200. So I would like to see a market that shows us 57% of the rounds are bringing in 12% of the revenue. Do you have a chart like that in here? Mr. Costa: No, I do not, but the summary does have the total for the resident play in 2011. $446,500. Chair Furfaro: What percentage of that is total revenue for the golf course? Mr. Costa: 43.3%. Chair Furfaro: You have seniors, super seniors? Mr. Costa: That last sheet of the 2011 revenue summary; which provides a yearly summary. Chair Furfaro: I am sorry the page again? Mr. Costa: Page 13 on the "Fiscal Year 2011." Chair Furfaro: Of that, what percentage of the rounds are senior and super seniors? Mr. Costa: The revenue? Chair Furfaro: Yes. Mr. Costa: That is right to the columns on the left. Super senior...$28,878. Seniors, $88,173. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 10 Chair Furfaro: And how does that compare to the number of rounds by those two market segments? Mr. Costa: Seniors are 17%. Chair Furfaro: Both super senior? categories? Senior and su g p Mr. Costa: Super senior is 9%. Chair Furfaro: 9%. Okay. It would have been nice to have a pie chart that said that, too. Mr. Kagawa, have you the floor and then Councilwoman Yukimura. Mr. Kagawa: I was just going to ask the question for you said residents 10,000? Chair Furfaro: For the one month. I passed it out the last time. Mr. Kagawa: Okay, good. Ian, I like this printout that you have given us monthly. It breaks it down pretty clearly, at least for me. It shows...I would just pull out a month. I will go to page 1. Fiscal Year 2013. And it is July, month end July, 2012. So that would be our first month of this fiscal. Mr. Costa: Right. Mr. Kagawa: If I look at the residents, we collected $35,575 for the month, Super Seniors $21,053. Seniors $82,060. I guess in comparing...well, we have to flip through to compare, yes? So I will compare over last year, just July. So the resident basically the biggest we went down about $2,000. From 2011, yes. So it is pretty consistent, but going down. Seniors went up. But I guess the big comparison I want to see is when we had both of the restaurant and Pro Shop operating, when was that last month that I can look to? Mr. Costa: December, 2011. Mr. Kagawa: December, 2011? Mr. Costa: Actually if you look at the fiscal year...let me see, that would be page... Mr. Kagawa: One more question and this is for the people in the back. Mr. Costa: That would show up on page 5 of the graphics. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 11 Mr. Kagawa: Okay. Well, I have one question for those in the back. Our restaurant, if you can just go back to our restaurant concession, when do we expect that bid to go out? Mr. Costa: I have been working...well, we are about to get our contract signed to do the improvements. The improvements, that contract allows for 60 days. So I am still hopeful, because I am trying to dovetail the invitation for bid for the restaurant concession to the completion of that. So I am still hopeful that will be beginning of this fiscal year or next fiscal year, hopefully July, if not by August. Mr. Kagawa: To get bid out? Mr. Costa: To get a new concession in. Mr. Kagawa: All right. Sounds good. Do you have any idea what the upset price will be? Mr. Costa: Well, the previous upset price which we are still looking at using was 18. $1,800 a month. Mr. Kagawa: My second question is, the Pro Shop, when is that contract expected to go out to bid for the Pro Shop and are we including the range balls as part of that contract? Mr. Costa: Yes. Actually, so if you look on my graphic, page 12, the last page. I do have a timeline there. Mr. Kagawa: Okay. Mr. Costa: If you follow that, I actually prepared the bid at the beginning of the year. Mr. Kagawa: Okay. Mr. Costa: We were encouraged to look at another amendment or extension and so we tried to offer that to the existing concessionaire, and closely towards the end of their contract even offered a reduction in rent. But that was declined. Mr. Kagawa: Okay. And are we including the balls? Mr. Costa: So I am now. Mr. Kagawa: Okay. Mr. Costa: I am amending the bid to include the range balls, yes. ,. .,e.,.,. ,.._.. m April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 12 Mr. Kagawa: What is the upset price that we expect? Mr. Costa: I am working on that. It would be tempting because the revenue goes from $5,000 to $7,000 it would be tempting to make that the minimum bid. I am not sure that would provide any benefit. Mr. Kagawa: It is hard to do that because will you end up picking up the cost of operating it. Mr. Costa: That is right. Along with that would be the responsibility to maintain not only picking up the balls, but maintaining the range mats and maintaining the netting, as well as the balls itself. Mr. Kagawa: So Ian, does that mean how much workers are currently allotted by our County? Mr. Costa: Currently we have one-half time position, and one-half time position that has been vacant. Mr. Kagawa: So what do we expect to do with those workers once the concession goes out? Mr. Costa: Of their half-time...20% of their time was put towards picking up balls. The other 80% was towards maintaining the grounds, cleaning the parking lot, picking up rubbish around the clubhouse, weeding. So our thought is that they would provide those services. Mr. Kagawa: Okay. Thank you. Mr. Costa: And supplement the maintenance staff. Mr. Kagawa: Okay. Thank you. Chair Furfaro: I am sorry, B.C. Before I recognize the Councilwoman, you know I have had...I am so concerned about Wailua Golf Course, I had my own staff going out to survey. We sent those surveys over to you folks to abstract some concepts about the facility and how it should operate. I do not know if you have...even if it is on a couple dozen surveys we have at least an idea of some of the people that we interviewed what they are looking for in the Wailua Golf Course. That is the start. That is start. Until we understand what kind of animal we are? Who we are servicing? And then along those lines and I will have that information, I had suggested you take this and say, a round of golf costs how much? Based on the staffing we have? So as we add these amenities, more people come. That is the only way you are going to reduce the expenses. But are we even sure what we want the concession in food and beverage to be based on the surveys? I mean would the customers be happy that it is a Pizza Hut/Taco Bell franchise, because that is all they want? You know, have we gotten that far yet? April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 13 Mr. Costa: I mean, I have been focused on repairing the facility. Chair Furfaro: Understood. Mr. Costa: To be in a position to have a restaurant. Chair Furfaro: Okay. But what I am saying is what when we go to lease the restaurant, right? There should be some understanding of what that restaurant is going to be. I mean, is it going to be a breakfast and full lunch service and pupus in the afternoon with a bar? Is that what the customers are looking for? Or focus on it being a dinner house, which we have no intention of it to be a dinner house. Here is the market and what they are getting, it costs the County of Kaua`i $27.31 per round of golf. That is what it costs us. That is the cost center, per round. Now either we improve the number of rounds, which will reduce that or we raise the rate on getting us there. I think all of us agree the goal is to increase the rounds. And that is why I would... the gentleman who came up with the golf concessions. I am okay with him lowering his fee to us because in his business, his concession, when the rounds come back, those 99 golf carts, 82 new, 19 rebuilt are being used more. So he benefits from that. But we need to understand the market that we are trying to build in a recreation area, and then along the lines...I am not saying that we are going to get to a break even, but you need to come to the Council and tell us how much each year we are willing to write off? Because it is a park. It is recreation for our citizens. This customer survey, which I have been sending my staff out to do will tell you what they are looking for. Now there are some basics there. We have got the sewer line. Okay? We have got the vent for the grills. We have got locker rooms that need attention. We have a banquet room we could rent for additional revenue, you know? So then after that, whatever other improvement comes, comes from the tenant, and the tenant we hired was Burger King or was the Sushi Chef, whatever the market is saying that they are looking for. That is important to us. And I do not want us to confuse the fact that what you are doing is extremely important. I mean we have to fix the tile. We have to fix the roof, the cooking vent, and so forth. But the other pieces that make that food brand work is up to the tenant that you put in there. Then we have to figure out how attractive are we willing to make it, and how willing are we to say, having the amenity is more important to the number of rounds we bill then getting $1,800 a month in rent. Those amenities are what drives the rounds, and that is what we need. In a golf market today, that is losing 2.5% of the golf market in communities across the board. We have to depend on our visitors to build that. Then on top of that, what have we heard from the Coconut Marketplace as far as them giving us a membership so we can attract hotel guests? You know, they should do a survey, those hotel people. Because their customers are saying if I come in the morning and I can get coffee, two eggs over easy and sausage and fried rice and go, you know? We have to know that to reposition a golf course. If they say I just want to be able to drink beer with my friends until 7:30 and make sure I can get some chopped steak, that has got to be known and that will help us drive...I know from a standpoint of repair & maintenance, Ian, you are the right guy to be doing this. But April 18, 2013 Parks &Recreation (Wailua Golf Course) (ss) Page 14 I am saying from a market understanding of what our golf course is going to be we need to get customer feedback. That is what we need to get. Mr. Costa: I will get back to your question about how we tell the bidders the kind of restaurant we want or that we believe will succeed. You know, I can only speak to the bids that I have seen historically and the way it is done currently. We require that the restaurant is open during the hours of the course. We have not historically said what we want you to serve or the limit of that operation. Chair Furfaro: I just want to make sure that you understand, personally, I do not care if we are getting one dollar for the restaurant a month and maybe I should not be so bold in saying that. What I want is whatever restaurant we have there will drive rounds of golf. People will buy golf balls. They will rent carts. That is what that amenity is about. The guy pays his own gas bill and he gets allocated for energy. He has his own payroll, but we want to tell you upfront, this is what we think the customers are looking for. Vice Chair, you have the floor, followed by Mr. Hooser. Oh, you were waiting in line. Go right ahead, JoAnn. I am sorry, my apologies. Ms. Yukimura: I have a somewhat different topic. So if Council Vice Chair has a follow-up, go ahead, please. Ms. Nakamura: Thank you for this information, Ian. I just wanted to follow-up to the Council Chair's point about the need for good user data. So that we can figure out how to position the amenities there, and I thought that is why we put in the funding in the budget last year to do that business plan analysis. So we can understand what the user needs are and we can understand how to make each of these amenities cater to the needs of the users, provide the services that are needed, drive the round of golf higher. That is why I thought that is why the Council put the moneys in the budget. I wanted to know where we are with that funding, and where we are with that the delivery of that request? Mr. Costa: Given the absence of the concession. We as the Administration made it a priority to number one, get the repairs done and get the concession back in as soon as possible. I would say that the one amendment I will work with our County Attorneys to do, because historically in the bid you define the space, the hours of operation, and then we go with the high bid. But what I am hoping to do is put more emphasis on evidence or a track record of running a successful operation as opposed to the high bid. Hopefully that will result and may not be the highest bidder, but hopefully it is somebody that knew how to price their bid to be successful and I still welcome all the surveys and I think that is something that we can move forward with once we get all the pieces of this operation back in order. Ms. Nakamura: Okay. I think this is separate though. The funding was through the Office of Economic Development. I just wanted to know if there is somebody who can address that? Is that going to come later when we deal? April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 15 Chair Furfaro: Make a call over to the Office of Economic Development and have somebody here. Ms. Nakamura: Is there somebody here from the Administration who can tell us where we are in implementing that line item in the budget? GARY K. HEU, Managing Director: For the record Gary Heu. Actually that line item was in the operating budget for Office of Economic Development. And a decision has been made that at this point we are not going to move ahead with that particular expenditure, along with a few other items. Also in Economic Development, for which we are not going to proceed with and part of that is the effort to establish some sort of fund balance to roll into next year. So that was part of a larger directive to all the Departments to cut back on travel, training, and other discretionary types of spending for current year in anticipation of the difficulties that we have in terms of balancing the budget for Fiscal Year 2014. Chair Furfaro: I would like to see if I can have the floor back? The Golf Course to this Council is a superior asset for this County. The work on the greens, the irrigation system when I first got on the Council, transplanting of paspalum. We have a great golf course and the components that make it from "great" to "excellent" is the restaurant and Pro Shop and I will tell that you the gentleman that we have in Economic Development, this guy is an excellent hotelier, a General Manager with an understanding of food and beverage, restaurant, and customer service and what an asset to have your brother in our arsenal of weapons in this Golf Course. We have to get to a point where we understand why our investment is so important in the Golf Course so it reduces our cost exposure. That we go from losing a $1 million a year to a half a million dollars a year. Because putting money in the reserve, you put money in the bank today, you are lucky to get one and a half percent. You reduce our operating exposure at the Golf Course by $500,000, we got 50% interest rate. I am not sure I am conveying the talent there. You have people there, you have people addressing the Golf Course facilities, ground and so forth. On the amenities this is where we are coming up short and that is why the Council put the money there. So I am a little bit distressed and yet I know you folks have the talent. That is all I want to say. Mr. Heu: And Chair, I mean in response to that, I think our focus relative to the Golf Course has been in trying to take the actions, follow through on the actions that Ian is describing, in terms of some of the maintenance work that was identified that needed to be done there. That is where our focus has been. Relative to the various...you know there is any number of expenditures within each Department that we are not proceeding with at this point in time, because of our fiscal condition. As we go around the table, I mean everybody has their own perception and their own needs and desires in terms of what they think is of most importance to the County. At some point, decisions have to be made in terms of activities that we are going to continue to fund and things that we will pull back on and that was the result of the decision not to move forward on that particular expenditure was a result of that exercise that we went through. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 16 Chair Furfaro: I just want to close and say, look, you have a visitor in the Golf Course, the revenue cycle for that visitor is $42.94. We keep chasing visitor rounds away we are going to end up with an average resident rate of$9.32 when the cost to operate each round of golf is $24.00. We are never going to get there. JoAnn, you have the floor. Ms. Yukimura: Do not leave, Gary. If the goal is to...if you are putting a priority on fixing the restaurant, how are you going to get good bids if you are not taking credit cards and you are chasing away customers? Mr. Heu; I think the credit card issue is something that we are continuing to look at. Ms. Yukimura: Well, it has been over a year. So it does not make sense to me that this priorities of the Administration, why would you not have grabbed that money we put in for a Strategic Golf Course Plan and used it to get information to boost the revenues to the Golf Course? I mean, to me, I would have just grabbed it, as soon as you could, and used it to figure out how to boost the revenues. But the first action you can take and I have not done it myself, because everybody around me and around this table has established credit cards for their businesses and other stuff. It is just kind of hard to comprehend why that has not been done and it would help me if you tell me we will have that done by next week, that would be wonderful or tell me what the complications are to getting it done? Mr. Heu: Well, I think, if we can allow Ian to continue with his presentation, that is part of his presentation. I think he has been in direct contact with certain financial institutions, trying to work through that. Ms. Yukimura: I do not know if you need financial institutions to go through it. Chair Furfaro: Mr. Hooser is next. Mr. Hooser: I would like to ask the Mayor if he could answer some questions for us on this issue. Chair Furfaro: Sure. Mr. Hooser: I really appreciate you being here during the budget hearings, and I feel and again I have only been here for five or six months now. And it seem like we hear the same story all the time. It does not seem right going around and around in circles, not being satisfied and not getting the confidence that I certainly need, that things are going in the right direction. As the head of the County and as the boss of all of these other people, I wanted to ask you to try to give me and us some confidence that this is the jewel of the island. The restaurant does not close overnight and it happens over time. The Pro Shop does not close overnight. mow April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 17 This tremendous asset has deteriorated over time and now we are looking at it, you know? We are getting, well we are working on it, we are working on it, we are working on it and I do not doubt that they are working on it, but that is not good enough, I do not think. We are being asked to raise taxes in this budget and the Department of Elderly Affairs is cutting out Meals on Wheels to people because the County does not have the money and feels like we are wasting money and not managing the assets. It is not personal to anyone, but it is a County management issue and as the head of the County, can you please give me some confidence what we are going to do different from this point forward than we have done in last how many years or months it has taken to get in this condition the Golf Course is in? BERNARD P. CARVALHO, JR, Mayor: First of all, we have a very competent team as you folks have addressed and many different issues and Golf Course, yes, is the gem of Kaua`i, It is a place where revenues will come. It is a place where we need good solid information and a plan in place. And yes, moneys were set aside to do a study. We met as an Administration and I sat with our team members and I shared the same passion and disappointment, too...that things are not moving as quickly as we all to want to. We have our golfers back here sitting here and I hear it every day. So we are trying as an Administration to address this particular concern like you are. I know it gets frustrating. However, I think with some of the information that Ian has, as we continue to go through this presentation, can be laid out for us and you have my commitment to move this forward as quickly as possible within the timeframe that we have, making sure that we address all the repair & maintenance issues and you can say, yes, why only focus on repair & maintenance. What is the bigger picture? We have done so many different positive things and many different areas in our Departments as team members, but specifically for the Golf Course, the maintenance of the course. We are talking about the facility itself and many different challenges that are laid out and want to assure that all ADA issues and repair & maintenance are addressed. Yes, the ATM issue, I am not happy with that. There was a machine there before on the premises and unfortunately there was an issue with that. I know we have the information to move that forward and as JoAnn mentioned how soon can we make that happen? Let us work together on that. The study part, you know I would love to do a study. I am not saying we are not going to do a study. At this particular time with all the menu of things that are happening and for us to try to manage it the best way and effectively, as an Administration, with the team members that we have in place, we are totally committed. I am telling you that. If you want timelines and saying we can work that through. The people want to assure that this particular gem of Kaua`i is managed and completed in a very timely manager. There are many contractual issues and I am not going to go through all of that. You are asking me and I am telling you that we have a plan in place and we are going to address it. Mr. Hooser: Okay. You know, we are not the boss of the people speaking to us. You know, you are the boss. Mayor Carvalho: I take full responsibility as Mayor of this County. And I am willing to sit here and tell you. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 18 Mr. Hooser: We cannot give them directions. We can ask questions and I find very frustrating with the answers that we are getting. The issue with the credit card, it not the issue of an ATM but accepting credit cards when people want to play golf and that can be done in a couple of days if the County wanted to do it and that is just one example. This is the third or fourth time I have heard the discussion since I have been here. We just need to get it fixed in this budget and I do not doubt your commitment, okay? I would like to see it resolved and I would like to see stuff happening and moving forward on this. I believe it is fair to ask you to address it as the boss of the other three individuals here. I thank you for coming and being willing to address the issue. Thank you. Thank you, Chair. Chair Furfaro: I am sorry, Mayor, here I address them. JoAnn. Mayor Carvalho: All right, Chair we are together in this. We are in the same canoe...well, separate canoes going the same direction. Ms. Yukimura: Mayor, I want to say that we appreciate your time here throughout the budget hearings. We know how limited your time is, but you are showing that you are putting importance on this and I think it is probably quite revealing to you to hear some of the issues through the questions of the County Council. So thank you for being here. I think Councilmember Hooser has expressed it well I think well the question that we want to pose to you, are you saying now there is a plan, if we just give Ian a chance to talk now he is going to give us this plan today? Mayor Carvalho: I would want Ian to at least present his piece first because he has laid it out we will regroup at the end and see the timelines and what we need to talk about. I have Steve here, on the fiscal side of this and there are some issues on how to get that done in a timely manner and go from there. Ms. Yukimura: Mayor, this credit card thing,the County is kind of the laughingstock of the community, because it is crazy that it has been over a year. So it would be really helpful to have some clear commitments about that Because we are literally turning away business as we have heard over and over and over again. Mayor Carvalho: I share really with you Chair and all of you. We are all frustrated, but at same time, there are so many other things involved in it and we will address it. Ms. Yukimura: We have not heard anything that convinces us that it cannot be done in a week. Okay? Thank you. Chair Furfaro: Mayor, I just want to summarize where we are right now. I think you are aware with the credit card situation, I went over to First Hawaiian Bank with Paul and said please urgently work with Parks and Recreation on this. That is a hot item. We also have the discussion so far as we understand it, that it looks like we are trying to get an operator in there by August 1. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 19 Mayor Carvalho: Yes. Chair Furfaro: I heard July 1st from Ian, but I am accepting August 1. Do you feel comfortable with that? Mayor Carvalho: Yes. Chair Furfaro: And we are talking to a golf cart concessionaire, and the County Council, who is willing to bite three months of golf cart concession to make sure that we do not lose an operator there, is something we also need to make happen during this interim time. Then this Golf Course bleeds, and what I am saying if we do this initial process that we have just went on concessionaires and operators and getting it back in shape, hopefully it will stop us from hemorrhaging and at $500,000 a year, I think you agree that is pretty important considering our cash position. On that note, I will ask Ian to come back up. Thank you for being here, Mayor. Mr. Hooser, did you have questions? Mr. Hooser: I do not know at the Mayor's request and if the Director wants to finish his presentation before we drill him with questions. Chair Furfaro: I did not know if you finished all of your questions when I recognized you? I hear your courtesy like now and we will let him finish his presentation. Thank you for the courtesy. I wanted to see if you still wanted the floor. Okay Ian. Go through your entire presentation. Mr. Costa: Well, I am just going to summarize the golf charts and revenue charts I did was to really I think what I gained from it was to show that based on the resident, super senior play and revenue those remain fairly steady, no matter what the conditions. I think if you look at the 2011 graphic, it is not evident that play or revenue from play was necessarily lost due to the loss of the restaurant. But I agree with you that the amenity is really what keeps people there. So I kind of want to jump ahead and get to what we intend on doing is number one, is get the concessions back in operations as quickly as possible. And I feel confident and I am shooting for the beginning of the fiscal year and I was actually hoping prior, but with all the hoops that we have to jump through, I am committed to that. Number one, the restaurant and the Pro Shop getting re-established, along with that, is also getting our ATM back, as well as credit card service. I will be meeting with the bank and I believe we need to provide some confidence to them we will provide a more secure encasement, if you will, for that ATM machine. With respect to the credit cards, I have been informed by our Purchasing Division that we need to bid that. I will be meeting with...we have three banks that we do business with. So meeting with those to get an idea of what service they provide and what is the cost of that service? But ultimately work with the Purchasing Division to get that particular bid out as soon as possible, which is irrespective of the concessionaires and repairs. Also coming in shortly with some golf fee amendments to provide some value-added round packages for non-residents. Basically two packages. one for a discounted rate in getting a foursome of tourists or visitors together. The other is a significantly discounted non-resident rate we would sell only to hotels that they could in turn offer golf and room April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 20 packages. Because right now, whether they offer a golf package it is still $60 by Ordinance. So I will be coming in shortly with that. The other thing is to...and we have recently spoken to someone who is offering their services to help us, but basically to develop a website for the Golf Course that is linked to the County website that can provide updates and provide feedback. Because there are people there trying to communicate with the Golf Course, but nobody is there to answer and post. But use that as a platform for advertising. We have also joined the Royal Coconut Coast and we have also joined HVB's web blast for offers and promotions should help as well. Overall the resident play is steady. That is our meat and potatoes. But the visitors are what help us narrow that gap. So our efforts will be focused on getting the amenities in line and providing the conveniences, financial conveniences to assure that the visitors do not walk away, because the condition of the Course is captured. I tried to put that in a nutshell and broke down the revenues by years and there has been a decline the last two to three years and I am not necessarily convinced that is necessarily linked to the loss of the restaurant, but I am sure we have gotten our losses from that as well. We have to get more golfers golfing. Chair Furfaro: I just want to make sure you just said we have to get more golfers golfing, but without amenities like a restaurant and so forth, the do not pick us over Puakea, they do not pick us over Makai, and we need to increase rounds. Not maintain status. Like the gentleman said it when he first came up, they do not pick us over others. Mr. Costa: That is clear to me and I want to touch on that we have taken some interim steps to mitigate the absence of those concessions and we just had a snack cart start today. I believe that is the limited feedback offering musubis, bentos and beverages and as Alan mentioned or the cart vendor mentioned we have interim mitigation to provide rental clubs. Whenever and apparently most visitors call to make reservations. That is when they are informed that if they need rental clubs, they provide a contact and through Alan, the clubs are provided when they arrive. Chair Furfaro: Now you have shared with us your target is July let for the restaurant. What about the Pro Shop? Mr. Costa: Between July and August, same target. Chair Furfaro: So we are feeling that with all of the improvements, the action that you are taking from amenities to credit cards to operators, we are looking at a budget that says by August 1st we are pretty fully operating? Mr. Costa: Back to whole, yes. Chair Furfaro: Three months. Okay. Let me ask you, within the CIP concept of the Golf budget, what is our status with equipment, maintenance, and so forth? Are there new equipment purchases on the radar screen here coming up? April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 21 Mr. Costa: Yes, we just awarded our contract to replace the majority of our equipment. Chair Furfaro: Did we get an equipment list for the Golf Course? Mr. Costa: Yes. Chair Furfaro: Just for the Golf Course? Mr. Costa: I believe it was listed on the budget last year, but I can give you a list of what was awarded. Chair Furfaro: Just awarded. Mr. Costa: Greens mowers, fairway mowers, the biggest update of equipment since we had the fire. Chair Furfaro: I saw Steve left and my next question was going to be intended for Steve. Can you folks answer, have we along with that equipment purchase have we found ourselves feeling comfortable with all of our insurance settlements on things that we were to be reimbursed with? We are in good shape on that? LEONARD A. RAPOZO, JR, Director of Parks & Recreation: That was handled, for the record, Director Lenny Rapozo. That was in 2010 we completed everything from the insurance company. Chair Furfaro: And everything that should have been replaced was replaced? Mr. L. Rapozo: Has been replaced. Chair Furfaro: Thank you. Okay. I am going to open it up to questions. Mr. Kagawa, did have you something? Mr. Rapozo? No? Vice Chair? Ms. Nakamura: Ian, can you walk us through the timeline on pages 11 and 12? Mr. Costa: Sure. 11 is the restaurant. Once the restaurant closed, we began looking at what repairs we needed to make, finding whatever reference material, old plans, to get an idea of what the cost would be. We began budgeting for those projects. In the 2012 budget, the current budget. So beginning June, beginning July, once we got our funding approved, I began working on the drawings for those various projects and I made a conscious decision not to bid the repairs of the restaurant separately from the repair of the scoreboard. But I actually lumped those together, three of those projects together. The restaurant repairs, the replacement of the scoreboard, as well as the insulation of concrete aprons surrounding the maintenance building together. Several reasons, first and foremost, so that I could use my time effectively to come up with one set April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 22 of bid plans as opposed to three. But also that it would then allow for a general contractor to manage all three aspects of that as opposed to having potentially three subcontractors. Ms. Nakamura: What was IFB? Mr. Costa: Invitation For Bids. So I prepared a set of plans for all three aspects of those combined in one set of construction documents, developed the specifications for that, as well as the bid packet. I completed that in December. We had a deadline for construction bids to be submitted to purchasing by December 31St. I guess what is not shown here is somewhere in the middle there, I got a little...I had to attend to another urgent matter in developing repairs for Po`ipu. But nonetheless, both of those were submitted prior to the deadline. So that is the first two lines. Then in processing that bid. Ms. Nakamura: I think it is a couple of pages long, so just the big-picture is that maybe? Mr. Costa: So it was finally posted, the bid was posted, I believe February 8th and bids were received in mid-March. We were about $50,000 short. The bids are coming out fairly high and we experienced that on other projects as well. So we had to huddle a little bit and figure out where we were going to supplement or get that money so that we could actually send a recommendation of award. So we have got to have the money before we can recommend award. So that recommendation came in the latter part of March, beginning of April. Then once we do the recommendation of award, the Purchasing Division sends notification to the vendor and we have to prepare the contract, but we cannot have copies of the bid material until it is awarded, which makes preparation of the contract a little difficult. Once it was awarded, we ploughed ahead there in conjunction with the County Attorney and that has been sent for signature and I am expecting that back days ago, so we can get that executed and turned around and notice to proceed to begin that 60-daytime clock. Ms. Nakamura: You are expecting to award the concession at the end of this fiscal year? Mr. Costa: Yes. I am also work on developing that bid, so that I can submit that by the end of this month. Or by next week. So that it can be bid and by the time we have a successful bidder, and a contract, that should dovetail with the completion of the repairs. Ms. Nakamura: So when are you probably looking at the concession actually starting? Mr. Costa: Probably August. Ms. Nakamura: August. Thank you. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 23 Mr. Costa: Given the timeframe it takes to award and get the contract executed. That will probably occur through at least the beginning of July or a good portion of July. Ms. Nakamura: An August opening, yes? Thank you. Mr. Rapozo: Councilmember Yukimura. Ms. Yukimura: I think it is a great idea that you established a website. I also think a snack cart or even a lunch wagon is a great idea. But how are you doing that without going through a bid process? Mr. Costa: We have been doing that through the same permit process we allow vendors in some of our parks. They come in and apply for a permit and we only allow that at the Golf Course when there is no restaurant concession and since the restaurant has closed, we have actually had, I believe two or three different lunch wagons that for one reason or another never stayed beyond a month or two. Ms. Yukimura: So when can you establish...what is your timetable on establishing credit cards? Mr. Costa: Well, I think I just said by the beginning of the fiscal year. Ms. Yukimura: You have been told that you have to go to bid on this? Mr. Costa: Yes. Ms. Yukimura: So why cannot you do a temporary arrangement? Like lunch wagons and other things while you are going to bid? Mr. Costa: I guess I would need to... Mr. L. Rapozo: I think Councilmember Yukimura the lunch wagon part is part of the Ordinance we can allow certain concessions within park facilities. In the cases of Ha`ena Beach Park, Black Pot, we have those lunch wagons there that have been performed through parks and in this case, since there is no vendor within the Golf Course, we allow a lunch wagon on the property, which would be different from the credit card. Ms. Yukimura: How are you allowing rental clubs without a bid process? Mr. Rapozo: We are addressing that stop-gap measure and we are hoping that we are not violating Procurement Laws by allowing it, but we are doing it temporarily while we get the Golf Shop concession back online. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 24 Ms. Yukimura: Seems that you should be able to do that with credit cards then too somehow. Mr. Costa: I will mention that to the County Attorney. Whatever they say I can do I will plow ahead and do it. Ms. Yukimura: The thing is, that you have had more than a year to go out to bid. So do you have a timetable, like have you for the concession timeline? When you are going to go out to bid by and when you have to go out to bid by, if you are do to do by the beginning of the fiscal year? And can you make that timeline? Mr. Costa: I do not have a timeline right now. But I could do one for you. Ms. Yukimura: We need to request that, please. How do you know you can do it by the end of the fiscal year, if you do not know what the timeline is to get it done? Mr. Costa: I guess I am just speaking from being committed to doing it. Ms. Yukimura: Okay. Mr. Costa: I know the bid process just a bid alone takes about a month to a month and a half. Ms. Yukimura: Okay. Mr. Costa: That is the processing time. Ms. Yukimura: I have other questions, but I will let others talk. Mr. Rapozo: Councilmember Kagawa? Mr. Kagawa: Alan worked on a solution that is kind of working out for the club rentals? Mr. Costa: Basically providing a referral to a rental club a person who rents clubs and he is contacted directly. He lets them know what the rates are and through credit card does the transaction and then he provides them a service by delivering it for them. Mr. Kagawa: So far, that is working out pretty good? Mr. Costa: We have only been doing it the last week, week and a half, but apparently, he has been doing about five rentals a day. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 25 Mr. Kagawa: Terrific. Okay. Second question. Mr. Rapozo: I have a follow-up. We got the okay from the Attorney's Office for doing that without going through procurement? I am just asking because I would assume if others are watching this, that renting clubs would probably be jumping out of their skin like now. I would assume that would have to go through procurement. Could we check? Mr. Costa: Okay. I guess part of that was when the concern arose, which arose... Mr. Rapozo: I understand, but the process is having the Finance Director sign an emergency procurement, which I do not think that would rise to that level...not golf clubs. But I just want to make sure that we do it right. Mr. Costa: I have been involved in some emergency procurements. Mr. Rapozo: I was not suggesting that, but that is the process and right now what I am hearing, we are actually running business through a private club-rental person without the procurement and I think that might cause some problems. If we could check that, Steve, I would suggest that we stop doing that until we get the okay, because I think it is a problem. Go ahead, Mr. Kagawa. Chair Furfaro: Can I just interrupt for a second? Steve, just a head's up. That is in discussion tomorrow, Purchasing is our first, and there will be a procurement question on this. Mr. Rapozo: Follow-up Councilmember Yukimura? Ms. Yukimura: Yes. I have the red-flags going up, too. What if you had a whole list of people who provide clubs, then you can give...you cannot even do that? Well, that could be kind of hard over the phone, if you were calling. But anyway, I mean, yes, that is a very big concern. Mr. Costa: Thank you, I will follow-up on that right away. Mr. Rapozo: Mr. Kagawa? Mr. Kagawa: Second question and I am just making sure we are having enough money in that account for other services of $60,000. We are already at $68,000, I believe this year on this report. So I am wondering are we expecting to trim the trees less? I am assuming that is the coconut trees, the coconuts I do not know why we budget less and cut that account when we are expecting the service to be the same. Mr. Costa: Normally, we trim the trees twice a year and we try to target trimming by the end of December. Then by the end of June. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 26 Mr. Kagawa: Okay. Mr. Costa: We did submit the bid for that early. We got a successful bidder. We were supposed to implement the contract to get the trimming down by the end of December. The bidder pulled out. He was a bidder from Maui. So we actually started late. We are doing a complete trim. So they are just finishing up right now on the complete trim and because they are trimming it now in February or March, our next trim would be like July or August. Mr. Kagawa: And just one last question, you know, this one has come up before, and I remember we had maybe plans to use that shed, the temporary storage shed. Mr. Costa: Yes. Mr. Kagawa: And I think the last time I heard we were possibly thinking of using it for Kapa'a Base Yard to store equipment. Mr. Costa: We did put some money in the CIP Budget We did get some input from a contractor and basically we want somebody to...the frame is still in good shape and a great asset. So our plan is to procure a contractor through a bid, to go dismantle it and reassemble it in two pieces actually. Right now, I believe it is 36'x96' long. So we would have two 36'x48', I believe. We can then use to store some of our equipment at both base yards. Mr. Kagawa: Okay. So we expect maybe how long for that to get done? Because it has been quite a while. It is like ripping even more and more and everybody tells me, please Ross, try to do something about that. Mr. Costa: So we did make contact and apparently the original manufacturer of that is no longer in business, but we did make contact with a comparable manufacturer, who has looked at it and can provide the replacement tarp for it. And any other...once we break it in two, we are going to need new end pieces. So we have been in contact and we have the contact for supplying that material and that was taken into account in our budgeting. Mr. Kagawa: Thank you. Mr. Rapozo: Councilmember Hooser? Mr. Hooser: Yes. Just a couple of quick things, I think. The credit card, my understanding is that the County has other Departments that use credit cards and so you might want to check with whatever bank they are using. We had a discussion about property taxes and others and apparently they are accepting it, so I do not know if that would help you with the procurement issue. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 27 Mr. Hunt: In addressing merchant services, there are two types. One is a swipe machine and those are independent usually lending institutions that you engage with and pay a percentage of revenue as a charge. Sometimes they are per transaction or per transaction plus a percentage, but it is also something that has to be bid and it cannot be that I want to choose and go and likely to go through formal procurement, six to eight weeks. The other one you are talking about is an online one which does not provide a swipe machine and the fees are paid by an individual. It is a joint procurement with the State that administers that. You could not use a credit card and swipe it. You would have to have a debit account or absorb that online and enter the information online. It is not an actually over-the-counter type of traditional service. Mr. Hooser: Does the County have any over-the-counter swipes? Mr. Hunt: I am not sure. Mr. Hooser: I guess my point is that if we do it would help with the procurement if we are already using the service somewhere else. Mr. Hunt: In the scope of work you have to estimate the volume and Golf Course if your typical transaction fee was $30-$40 and you anticipated 80,000 rounds and a third of that would come by the way of merchant service you come with an estimate for that. You have to provide that in the specifications so the bidder knows. Mr. Hooser: So the Golf Course has never had a website? Wailua Golf Course? Mr. Costa: No. Mr. Hooser: Never. Okay. The initial discussion we had discussion about the g olf cart concession and whether to increase rates or lower the fees and I am assuming as the Manager of the Golf Course, you have discussed this with him and looked at his books. Mr. Costa: He submitted a request that the Finance Director and I met with him on. Mr. Hooser: You will be making recommendations? It seems like the management would recommend what they want to do, not the Council. The Council would respond to the recommendation. Mr. Hunt: Correct and I think again, the concerns were raised about how quickly these other amenities are going to be up and operating. There is a certain amount of business risk and certain assumptions that the winning vendor takes into account and if they are incorrect, we are not here to subsidize those decisions, but certainly to the extent the rounds of golf played and the carts rented are somewhat our April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 28 responsibility for not having the full amenity package we are weighing that to get that up and operational to support that. Beyond that, it is vendor risk on that bid. Mr. Hooser: Okay. I see that point perfectly well. I want to make sure that the Administration has a position on it even if the position is not to offer further concessions. So you understand what I just said? Mr. Hunt: I believe so, yes. Mr. Hooser: Okay. You could recommend that the status quo is the status quo and that is business is business or you could recommend giving a break or raising rates and I want to make sure we have recommendations on that before we would make a decision, if we are asked to. Okay? Mr. Rapozo: I have a follow-up to that, if you do not mind. Mr. Hooser: Sure. Mr. Rapozo: It is the position of Administration that there will be no amendments to the contract for the carts? Mr. Hunt: Based on the time schedule that I have been provided by Ian, I believe that we will have the amenities operational within a short period of time, and should continue with the contract. Mr. Rapozo: Okay. I guess I am not as optimistic, because it just takes a long time, like Ian was talking about the bid process, the construction process. I just leaned over to Nadine and said in July...it is not going to happen in July. we know that. It will not happen by July. I think that is a good timeline to have and that is a good target. That is beyond Ian's control. If all goes right, but it rarely does. When they bid on the contract and I understand there is some business risk and there are reliance as well at a golf course there would be a restaurant and a Pro Shop and when those disappear, so does player play and I would assume if he was to get out of contract, he only loses $80,000, but I think the lawsuit that follows might be a little bit more expensive than $3,000 a month, in my opinion. So that is fine. I got your position and I wanted to make sure. I have one more follow-up on the credit cards. The ATMs in the County, do we go out to bid on those? Mr. Hunt: My understanding is that the ATM that is currently in County Pi`ikoi Building did not go out to bid? Mr. Rapozo: What about the one at the Police Department? Mr. Hunt: I am not sure. Mr. Rapozo: What is the difference between accepting a credit card at the Golf Course and putting in a ATM versus a credit card? Because whether I look at a credit card transaction machine as...it is part of the service that the bank provides. We April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 29 bank with whoever we bank with and I believe we probably have a lot of money in that bank. Mr. Hunt: Having been a former banker, the use of the ATM sites are selected by the banks themselves. Mr. Rapozo: I understand that, that is in general. The bank would solicit the shopping center, but when you come across that government line, there is a procurement code that says you cannot allow a bank and all I am asking because you say we need to go to procurement for a credit card swiping machine. What would be the differentiation? Mr. Hunt: Think with merchant service we are actually paying them for that service. I think with the ATM, the banks are relying on interchange fees from people using the ATM. Mr. Rapozo: In a County facility. Mr. Hunt: Right. Mr. Rapozo: In a County facility. It is like me setting up a lunch wagon in this County parking lot. It costs the County nothing. I am make money off of the County asphalt, the parking lot. You cannot do it. I am asking the question because for the life of me I cannot understand why we are having such a struggle to take credit cards. I apologize for interrupting but I wanted to get that point. Thank you. li Mr. Costa: I feel like I should add that what we did not go to bid for the ATM at the Golf Course. Mr. Rapozo: That is what bothers me more. We are not going to bid for ATMs, we are not going to bid for club rentals and it is really, really concerning. Mr. Hooser: I have one more question. I had asked at least three times for information on pesticide use from the Parks Department and of the Golf Course specifically. It has been at least three months, maybe four months and two in writing, one in person. When do I think I will be able to get a response? Mr. L. Rapozo: First of all your first request was not through the protocols that was set up by both sides of the street so I pointed that out to you. I have all the information in my office and I just need to get it over to you. Mr. Hooser: So the first request was not through protocols. Mr. L. Rapozo: Yes. Mr. Hooser: So you just ignored it? April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 30 Mr. L. Rapozo: No, I told you about it when you asked me about it. Mr. Hooser: And then second request was through protocols? Mr. L. Rapozo: This last one was through protocols. The next one was a letter. The first one you went directly to the Golf Course. Mr. Hooser: It has been three months. Mr. L. Rapozo: Yes. Mr. Hooser: I do not ask for much. Mr. L. Rapozo: Yes, you do not. Mr. Hooser: So I just appreciate some courtesy as a Councilmember to get the information that I asked for. Mr. L. Rapozo: Sure. Mr. Hooser: Okay. So when will I have that? Mr. L. Rapozo: I am coming to Council next week Wednesday? Do I need to prepare for something? Mr. Hooser: You said it is at your Office. Mr. L. Rapozo: I need to write it up before you. When I come before you, I want to be prepared, so I do the work before I come here. Mr. Hooser: So do you think I will have it next week? Mr. L. Rapozo: Yes. Mr. Hooser: Thank you. Thank you very much. That is all, Chair. Chair Furfaro: On this protocol thing, I want to make sure that for the audience everybody understands, the rule is all correspondence goes through the Chair. Okay? The agreement that I negotiated with the Mayor was the following: You are Planning Nadine, you do not have go through me. You are Parks and Recreation, you can go directly. That is what we are referring to for the audience. Secondly, if a member wants to go to a Department specifically and knows their counterpart, they can write to you. On the f ipside, hey, let us treat everybody with a little bit of Aloha. I do not want to lose the negotiation that I made where individual Committee Chairmen may go directly to their counterparts. So let us try and live a little Aloha as well, okay? That was a negotiation, -52.131111111, ,d11111M April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 31 because the Mayor can go back to the original rule. Everything has to go through the Chair. So we have expanded that. Okay? I want to make sure that I understand where we are at here, because you folks gave us July 1st. I am saying we are going to hold you accountable for August 1st, okay? Steve, you hear? Mr. Hunt: I know we are short-letting the Pro Shop and I am certain unless there are no bidders that want to go in there that we will have that by July 1st. I am hopeful to have by August 1st, the restaurant. Chair Furfaro: But I heard today August 1st. I directed it to the Mayor as well. He understands. It has got to have some reach in it, but it has got to be realistic, okay? Mr. Hunt: Yes. Chair Furfaro: Secondly we got testimony from the cart concession. I do not put a lot of weight on being willing to negotiate with this gentleman for 90 days on a $3,000 discount. That is not going to make or break the County, but the important thing is that we do not lose any more amenities there. The second thing on the grounds that we have. The status quo is a $1 million loss. We have to improve on the rounds, so that we can reduce the cash loss. So those things are really, really important. Now I want to give you a few briefings that are in the comments that we have solicited from people at the Golf Course. Okay? The restaurant amenity and the Pro Shop amenity are very, very important. We need a concession to be able to feel that we are playing at a bona fide golf club. The chipping green and we have people from the greens committee here, the chipping green came out a couple of times in the survey of needing some attention the driving range nets came up in the survey several times and a constant comment from residents is that the visitors are missing the food and beverage concession and then choose to go to other golf courses. The other one is a good one, booking times can be improved by going to a website. That they can go online and book and that might be something that you want to discuss with it. The twilight rate from residents seems to have come up quite a bit. Mr. Costa: What was the comment there? Chair Furfaro: They are looking for a better rate at twilight. It is pretty common in there. We have rates that change at 2:00 p.m. right? Do we have rates that change again at 4:00 p.m.? Mr. Costa: No. That is when the trespassers line up. Chair Furfaro: That is what it seems to be I guess it could be considered that. But it is an item that they feel, play nine holes after they want to reduced rate and play after 4:00. Maybe that is a Monday-Friday thing, but those are things that I am sharing with you on the chipping greens and that we are getting good feedback on the expectation of the Golf Course and the weaknesses. You have to line this up with opportunities and threats, you know? That is there. Tomorrow we start at 9:00 a.m. Am I correct, Staff? I am trying to wrap it up. You have a question? Go ahead. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 32 Ms. Yukimura: So you said you are developing some kind of discount packages? Mr. Costa: Primarily through golf fee amendments, new golf fee rates yes. Ms. Yukimura: So you are going to be proposing new rates? You are going to be proposing an amendment to the Golf Course Fee Ordinance? Mr. Costa: Yes. Ms. Yukimura: Okay. Just to piggy-back with what the Chair was saying and I agree that the website done well could help with tee time scheduling and I do not know if you would want some kind of way for people to pay to secure their tee times. There have been some requests for non-residents to have morning tee times, some issue like that. Are all morning tee times reserved for residents? Mr. Costa: I do not believe so. On weekends I believe there are a number of golf clubs that take up a lot of the tee times in the morning. Ms. Yukimura: Well, is that in the fee schedule? Who sets that? Chair Furfaro: I will answer the problem. The problem is that a lot of the clubs have the prime times and a lot of seniors have the prime times and the reality if you want to improve the ADR for the Golf Course you have to include the guys paying the $42 rate. Ms. Yukimura: What is ADR? Mr. Bynum: Average Daily Rate. Mr. Rapozo: Alternative Dispute Resolution. Chair Furfaro: That should be in the marketing plan and you guys need to think that out. If I am a visitor and I want to play on a weekend and I cannot get a tee time until after 10:00, I am going to Puakea and you have to leave some open tee times to the higher rated business, you know? Mr. Costa: I know that is organized to some degree through the Kaua`i Golf Association and they do rotate the times of those clubs. Chair Furfaro: JoAnn has raised a question that you folks need to look into it. I am not new to booking a golf course. I am not a golfer, but I had to answer to the bottom line to many owners in Japan, from Wailua, to Consolidated Oil and Gas at Princeville. There is a science to marketing the golf course and tee times have to be available for all market segments and can do that by keeping 4:00-8:00 available times. JoAnn finish your question so I can complete the wrap up. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 33 Ms. Yukimura: I am pretty much finished. It is revealing there is no marketing plan and you need a marketing plan, if you have all of these different groups. We are not saying eliminate all of that, but there has to be some thinking of how you will maximize or optimize your fees and income. To me that moneys that were given to Economic Development could have been used perhaps to do that kind of thinking. Anyway, because it is bleeding that is going on here, $1 million from the General Fund to subsidize the Golf Course and the thing is that the Golf Course does not even have reserves. So they are not planning... I do not think there is thinking about replacement, about depreciation, and that is why I object to it not being an Enterprise Fund because I think an Enterprise Fund imposes that kind of discipline. Thinking of it as a business, and if anybody who is concerned about the sustainability of this incredible asset needs to be concerned about the fact that we do not have a reserve. At least in previous Administrations of the Golf Course, they were hesitant to ask us for big expenditures because it always means a General Fund subsidy. So it is just a very non-workable system and that is what we're asking to you look at correcting and putting it in good shape, so we can see a long-term existence of this amazing facility. Thank you. Chair Furfaro: Do you have any more questions? Everybody done? Okay. Wrapping this up for today, you folks can see that we are look for some strategies and we are going to hold some feet to the fire for August 1st. Tomorrow, the first item tomorrow 9:00 is we are going to cover Purchasing policies and so forth and Steve, be prepared for this p uestion that seems to come up a lot in Parks about issuin g contracts and q then negotiating through the bid process. Followed by Finance-Risk Management. You are in good shape on that tomorrow? Then we are going to go to Civil Defense. Then Fire in the afternoon. We are going to have Fire again and this one is on Ocean Safety for the Fire Department. I want to remind us that on Monday, 9:00-11:00 we have Economic Development. We are covering their CIP, the Film, and Workforce Development and Agriculture activities. Then on Tuesday, we have Roads Maintenance from 9:00-11:00. JoAnn, you have got that in your calendar; right? Then we are doing the Humane Society again. In the afternoon Monday I am going to hold the whole afternoon for HR on Monday. Mr. Hooser? Mr. Hooser: I have gotten some calls from the Humane Society. Chair Furfaro: You should see the E-mails that I have gotten and I was not even at the meeting. Mr. Hooser: The question is do they want to testify on the budget items? Chair Furfaro: Come at...what time do we have the Humane Society? 11:00 a.m. Mr. Hooser: I can tell them 11:00? Chair Furfaro: 9:00 or 11:00. April 18, 2013 Parks & Recreation (Wailua Golf Course) (ss) Page 34 Ms. Yukimura: May 1st is the official Public Hearing on the budget. Chair Furfaro: You took the words right out of my mouth JoAnn. Ms. Yukimura: I am sorry. Chair Furfaro: Mr. Hooser, you heard Vice Chair, we have time for any item on the budget scheduled for May. But specifically, 11:00, right Scott? On Tuesday. So on that note, we are recessed until tomorrow, 9:00 a.m. There being no objections, the Council recessed at 4:39 p.m.