City Council Minutes

Thursday, January 26,2006

JANUARY 26, 2006, 4:00 P.M.

Mayor Daniel McArthur
Council Member Rod Orton
Council Member Gail Bunker
Council Member Suzanne Allen
Council Member Bob Whatcott
Council Member Larry Gardner
City Manager Gary Esplin
City Attorney Shawn Guzman
City Recorder Gay Cragun

Mayor McArthur welcomed all present and called the meeting to order. He then led the pledge of allegiance. The invocation was offered by Pastor Wilkie.

Mayor McArthur announced that a transportation open house will be held on February 7 from 11:30 a.m. to 7:30 p.m. at the Dixie Center, and invited all interested persons to attend. More information can be found on the City?s web site.

Discussion concerning approval of a boundary line adjustment with Santa Clara City to remove 10 acres located west of Chaco Bench Phase 2 in the northwest area of the Entrada development from St. George City and include this area within Santa Clara City. Shan Gubler, applicant.

Shan Gubler presented renderings of the proposed spa and explained that his entire project will have public streets, but Entrada will remain gated. The spa will be two stories, but the cottages for overnight accommodations will be single story and nestled down into the lava.

Council Member Allen inquired if the nearby residents of Entrada were OK with the proposal.

Mr. Gubler replied that there was unanimous support for the project except for one resident, and her concern was she felt the undeveloped land would never be developed.

City Manager Gary Esplin inquired if there was a reciprocal agreement for use of the golf course.

Mr. Gubler replied that arrangements have been made to permit guests of the spa to use the Entrada golf course. These guests are in fact welcomed by Entrada because their participation is needed to support the golf course.

Dara Tancredi, a resident of Entrada, expressed concern that the view corridor through Snow Canyon would be lost. She stated that it would be detrimental to St. George to lose control of the 10 acres due to the tax base.

Jan Mower, an owner in Entrada, stated she did not understand why property which was annexed from Santa Clara into St. George is now being deannexed back to Santa Clara. She expressed concern with traffic and the possibility of 300 golf carts using the Entrada entrance. She stated Mr. Gubler?s plans include 100 timeshare units. She stated the reason Mr. Gubler is asking for the deannexation is because St. George would not allow this area to be zoned commercial.

Mary Ellen Klein commented that she owned four lots in Chaco Bench and St. George should retain the property because of the tax base.

Shan Gubler, applicant, explained that his development will be governed by Entrada and be subject to all its rules and regulations. Santa Clara City will provide the infrastructure for the project. He explained that he purchased the subject property from Brent Beesley, Brooks Pace, and the Entrada Company and it was planned for residential lots, not open space.

Community Development Bob Nicholson disagreed, stating that this may have been Entrada?s intent, but the subject property had not been designated for residential lots.

St. George City Council Minutes
January 26, 2006
Page Two

City Manager Gary Esplin inquired what the property would be used for if the deannexation were not granted.

Mr. Gubler replied that homes would be built on the property. The road has been on Entrada?s master plan and would be used for vehicular travel. The current proposal is to use the road for golf cart access only. He stated that the setback for the spa is much further and would have a lower profile than homes would have. The homes would also block significantly more of the view as they would have to sit up 8' on the dirt. The area for the spa is being lowered, with one story in front and the second story set back. This will provide a far better view corridor than homes. He clarified that when Entrada sold him the property, it was with the idea that a spa would be built on it. The spa is a desired amenity for the Entrada community. If the property remained in St. George, he would petition the City for a zone change. He stated he was not asking for a deannexation for the purpose of zoning.

Council Member Bunker inquired why the roadway had to be for vehicles instead of
just for golf carts.

Mr. Gubler replied that emergency vehicle access had to be provided.

Council Member Whatcott commented that a large piece of Mr. Gubler?s land has a conservation easement on it and will never be developed, another large piece is in a ravine, single story cottages will be built on one side, and the spa will be one story on the front with the second story unit set further back. He commented he did not know what else the applicant could do to further protect the view corridor.

City Manager Gary Esplin advised that the tax base received from the spa would be insignificant as far as the total budget. He stated that since Mr. Gubler has only 12 acres in St. George, and 500 acres in Santa Clara, it makes sense from a planning standpoint for the utilities and access to be developed as proposed.

MOTION: A motion was made by Council Member Gardner to approve the deannexation by ordinance.
SECOND: The motion was seconded by Council Member Orton.
VOTE: Mayor McArthur called for a roll call vote, as follows:

Council Member Gardner - aye
Council Member Orton - aye
Council Member Allen - aye
Council Member Whatcott - aye
Council Member Bunker - no

The motion carried.

Presentation of proposed golf fees and approval of a resolution setting golf fees for City golf courses.

Economic Development Director Matt Loo introduced key golf employees. He explained that the last time the City raised golf rates was in 2003-2003. Staff has been trying to operate the golf courses within a budget but in doing so has faced many challenges due to the weather, flooding, etc. He distributed a packet of material containing proposed rate increases and reviewed them. See attached Exhibit ?A?. He recommended implementation of unlimited pass play on all courses June through September at a cost of $100 per month. He explained that an increase in fees will not cover all needed expenditures for the golf course, and also recommended a loan be made to the golf course fund from the economic development fund in the amount of $500,000 to be used for capital improvement projects needed on the courses. This will allow the City to get started on the capital improvements immediately.

City Manager Gary Esplin clarified that if a loan was made from the economic development fund, it would not be paid back until the bonds were paid.

Mayor McArthur inquired if the increase was adequate to cover the cost of equipment replacement for the next five years. He was advised the increase was adequate to cover this.

St. George City Council Minutes
January 26, 2006
Page Three

Mr. Loo explained that staff would like to look at equipment leasing options. This would save the City $75,000 to $100,000 a year in maintenance and allow the equipment to be rotated every five years.

Council Member Bunker inquired as to the negatives of the golf fee proposal.

City Manager Gary Esplin replied that economic development funds would not be available to use for other projects for ten years.

Mayor McArthur commented that the funds would actually be earning better interest than in the treasurer?s pool.

City Manager Gary Esplin explained that the City would not be losing interest, just the availability of the funds. Mr. Esplin explained that the cache card would be purchased for $300, or any amount set by the City Council, and then swiped at any golf course, with a balance left on the card, similar to a punch card, but reuseable. When the amount on the card is used, it can be reloaded.

Assistant City Manager Marc Mortensen explained that the cache card could also be used for special promotions and at every City facility which accepts it, in addition to the golf courses.

City Manager Gary Esplin suggested a minimum of $300 for the cache card. He explained the card could be used by the purchaser, his or her spouse, and any children living at home. It could not be used by friends of the purchaser. The cache card is a reward for frequent players, similar to a punch card, and verification will be needed when it is used, similar to a credit card.

Mr. Mortensen explained that if the cache card is lost, it can be replaced for a minimum fee of $10. If a punch card is lost, the value is lost. There would no longer be resident vs. non-resident rates.

City Manager Gary Esplin explained that the punch card currently is not covering the cost per round at any of the City?s golf courses. Increasing the rack rate to more than the actual cost per round for those people who do not play regularly will allow the City to give a break to those who frequent the golf courses. He explained that every dollar generated on the golf courses is applied to the golf course fund which is an enterprise fund. The golf course fund lost $500,000 last year due to the flood and the City had to extend the golf course bonds for one more year. The City does not have a fund for replacement of infrastructure. The City should also look at a rainy day fund.

Matt Loo explained that a cache card can be used to pay for a cart, as well as for green fees.

Council Member Gardner commented that the cache card provides locals with a better rate and relieves the pros of the fiasco in trying to decide if someone is a resident or not.

Council Member Bunker inquired about the possibility of using the cache card Sunday through Thursday, rather than Monday through Thursday.

Council Member Whatcott stated the cache card would be valid Monday through Thursday, just like the punch card.

Golf Pro Allen Orchard commented he thought the cache card would be good at Red Hills seven days a week.

Mayor McArthur replied that the City needs to raise funds to maintain the courses and pay for capital projects, and that is the bottom line.

City Manager Gary Esplin commented that the City Council will have to decide when the cache card will be valid, but the goal is to maximize the rack rate during the busy time of year, otherwise there will not be sufficient revenue to cover expenses.

Golf Pro Reed McArthur advised that at Sunbrook the punch card is only good Monday through Thursday, October through May. At the other courses it is good seven days of the week.

St. George City Council Minutes
January 26, 2006
Page Four

Council Member Whatcott explained that the cache card is no different than the current punch card, and nothing would change.

City Manager Gary Esplin commented that the punch card is a better rate than what the person from Salt Lake can play for. He stated there was no reason to limit play June through September when there is daylight from 6:00 a.m. to 9:00 p.m. and the capacity on the courses is wide open. In February through May tee times are at a premium and players are willing to pay a higher rack rate.

Rich Williams commented that local golfers would see no benefit to a $300 cache card, and inquired if the price could be lowered to $170, the same price as the punch card. He inquired why there couldn?t be a resident and non-resident rate.

Council Member Orton replied that a $300 cache card will discourage non-residents from purchasing the card, yet allow locals to play for a cheap rate. He stated that it was too difficult to prove residency.

City Manager Gary Esplin explained that tax money is not used to subsidize the golf courses. He inquired if residents of Santa Clara and Washington, or snow birds who live here in an RV part of the year, should be considered residents.

Mr. Williams commented that city golfers want to see good courses at a good price. They want clean restrooms, safe parking lots, and good grass and greens which are fun to play and well maintained, without being fancy. Locals should not have to pay the prices of a country club; they want good quality for a good price.

Mayor McArthur commented that the cache card is simple and requires identification. The City must run its courses like a business and it cannot sell the service for less than the cost.

Mr. Williams commented that nothing said today convinces him that the courses are being well managed or that the City is running out of money.

City Manager Gary Esplin commented that the Golf Course Fund lost $500,000 last year due to the flooding.

Mayor McArthur commented that Southgate has not even been rebuilt.

City Manager Gary Esplin invited Mr. Williams to review the City audit to see where funds for the golf courses are coming from. He commented that if the golf courses were making money, or even breaking even, this discussion would not be necessary.

John Gallagher commented that he represented a pool of 10 seniors concerned with the increase in the punch card or cache card. He commented that in the heat of the summer the non-residents will not play, but the residents will. He stated he felt the rate for the first two quarters should be at least absorbed in part in the summer rate, and that residents should get a break due to the increased cost of utilities, prescription drugs and health insurance premiums.

Doug Crandall suggested that a tax form be used to prove residency. He inquired what would happen to any balance left on a punch card.

Mayor McArthur replied that the balance could be used up at the rate purchased.

City Manager Gary Esplin replied that golfers can use the punch card until it is gone.

Mr. Crandall commented it would be more reasonable to maintain the punch cards and maintain a resident and non-resident rate. He stated he could not afford to pay $600 for two cache cards - one for his wife. He stated the cost of living index was not equal to the cost of the increase.

City Manager Gary Esplin replied that a husband and wife could use the same card. He clarified that at Sunbrook someone without a cache card would be paying 33% more than someone with a cache card.

St. George City Council Minutes
January 26, 2006
Page Five

Council Member Whatcott commented that the proposal is for some rates to go up, and for some to remain the same. There is a difference between the resident vs. non-resident rate through purchase of a cache card, and this is a reasonable and fair rate for locals.

Mr. Williams inquired how to upgrade the cache card.

Mayor McArthur replied that it could be upgraded at any time, with any amount put on it.

Mr. Williams suggested that residency could be determined by a tax return form.

Council Member Orton commented that staff has tried to come up with the fairest and simplest rate it can with residents in mind, but there may have to be adjustments from time to time.

Mr. Crandall inquired about the balance left on a cache card if a spouse dies.

Mayor McArthur replied that it could be used by the surviving spouse.

Robert Punkley commented he did not agree with the fee increase because $300 would not pay for green fees and a cart two times a week for one year.

City Manager Gary Esplin advised that refunds would not be given on the cache card. Refunds are not given on the current punch card. However, if someone becomes legitimately incapacitated and cannot golf, a refund would be considered on a case by case basis.

Council Member Allen commented that if the City were raising golf rates a dollar or two yearly, this discussion would not have to be held and the increase would be easier to absorb. The proposed increase amounts to just that - an increase of a dollar or two over the last several years. She suggested that golf fees should be looked at and adjusted yearly until the bonds were paid.

Council Member Gardner commented that considering how long it has been since the last adjustment, the proposed increase is reasonable.

Council Member Whatcott commented that while it is true medicine and insurance have gone up for the elderly, the cost of fertilizer and employee salaries have also gone up, and in order for the City to stay equal, a rate increase is a reality. He inquired about the minimum needed to refill a cache card.

Assistant City Manager Marc Mortensen suggested that the minimum be $300. He explained that the cache card is also a loyalty card. It would be good in season Monday through Thursday, and in the off-season, seven days a week.

Council Member Whatcott expressed concern about the initial $300 outlay on those on a set income.

City Manager Gary Esplin advised that a golf pass would also be available for four months of the year, from June until September, at $100 a month. This pass would be separate from the cache card.

Council Member Whatcott inquired about motel golf packages. He suggested that golf packages should be paying the rack rate which would justify obtaining a tee time six months in advance. He suggested that discount rates for golf packages be abolished.

City Manager Gary Esplin advised that a decision on the fee increases had to be made by February 1. Any new rates approved will become effective February 1.

Council Member Whatcott commented that the pros know who have punch cards and they should give the punch card rates but not sell any punch cards until the change happens.

An unidentified gentleman inquired what the 18 hole rate for Southgate would be.

St. George City Council Minutes
January 26, 2006
Page Six

Council Member Whatcott replied that it would be $21 in the winter and $13 in the summer. A cart is extra.

MOTION: A motion was made by Council Member Whatcott to approve the rates as proposed on Exhibit ?A?, attached hereto, to initiate the interfund loan, with the caveat that the City look at the employee status of concessionaires between now and June 30, as well as improvements needed on the courses, purchase of needed equipment, and that the quality of the golf courses be maintained 12 months a year, not just eight or nine months a year, and seriously look at use of a water injector.

SECOND: The motion was seconded by Council Member Orton, commenting that the new rates would take effect February 1.

MOTION CONTINUED: Council Member Whatcott clarified that his motion also contained the condition that passes be discontinued except for a summer pass, good for four months at $100 a month, and the motel rate changed to the rack rate, and initiate the cache card at an original purchase price of $300, and a $300 refill minimum.

SECOND: The motion was seconded by Council Member Orton.

City Manager Gary Esplin advised that the courses would honor any hotel packages already booked, but any others booked after February 1 would be at the new rate.

Assistant City Manager Marc Mortensen clarified that if a cache card were down to $150, it would only take $150 to reload it.

VOTE: Mayor McArthur called for a roll call vote, as follows:

Council Member Whatcott - aye
Council Member Orton - aye
Council Member Allen - aye
Council Member Bunker - aye
Council Member Gardner - aye

The vote was unanimous and the motion carried.

MOTION: A motion to adjourn was made by Council Member Orton.
SECOND: The motion was seconded by Council Member Bunker.
VOTE: Mayor McArthur called for a vote, and all voted aye. The motion carried.

Gay Cragun, City Recorder