City Council Minutes

Thursday, April 28,2011

APRIL 28, 2011, 4:00 P.M.

Mayor Daniel McArthur
Councilmember Jon Pike
Councilmember Gail Bunker
Councilmember Gloria Shakespeare
Councilmember Ben Nickle
Councilmember Gil Almquist
City Manager Gary Esplin
City Attorney Shawn Guzman
City Recorder Gay Cragun

Mayor McArthur called the meeting to order and welcomed all in attendance. The pledge of allegiance was led by Gay Cragun and the invocation was offered by Gloria Shakespeare.

Support Services Manager Marc Mortensen introduced Joel Andrus from Bowen Collins who a year ago made a presentation to the City Council on the need to conduct a feasibility study to determine whether or not the City wanted to look at a mitigation bank or in lieu fee program for the Virgin River area and other areas. The City at that time approved an agreement to conduct a study, and Mr. Andrus is here now to present his findings.

Joel Andrus presented a power point presentation covering the following topics: What is an in-lieu fee program? Existing Permitting, Proposed St. George ILF, Outcome of Feasibility Study, Funding, Future Work Plan, Sponsorship of the ILF, Prospectus, and Recommendations.

A representative from the Army Corp of Engineers advised there is a possibility of getting credit for work already done.

City Manager Gary Esplin suggested the area by the wastewater treatment plant due to its large acreage.

After discussion, it was consensus of the City Council to move ahead and schedule a meeting with the Washington County Water Conservancy District, the County, and other cities to discuss a possible partnership.

Todd Jacobsen presented a power point presentation entitled Revision to the Community Development Fee Schedule. He explained the purpose of the revision is to be able to do lot line adjustments by document rather than by amending the plat and to set fees for this purpose.

Councilmember Pike inquired how the City determined its cost for these services.

City Manager Gary Esplin replied a study was done by Lewis Young.

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It was the consensus of the City Council to move forward with the revised fee schedule. The matter will be scheduled on an upcoming City Council agenda.

Councilmember Gloria Shakespeare explained that she has received numerous letters and calls regarding golf. She knew nothing about golf, but began gathering research. All City golf pros are independent contractors who receive a salary and health insurance, but not retirement. Each pro is allowed six days for tournaments and they retain all profits from the tournaments, except cart fees. These tournaments take 24 days of greens fees from the City, although the City does receive the cart fees. She said she studied how golf works throughout the state and compared all the cities used by the City in its salary survey, and also used Mesquite and Las Vegas. Because the pros are independent contractors, there is no way to know how much goes through the pro shops and snack bars, and her concern is that the City should know how much each of the pros are making. Many cities she surveyed have made changes and taken back the pro shops and snack bars. The profits made from the pro shops and snack bars should belong to the City to help pay for the golf courses. It makes sense to take over the pro shops and snack bars so that the City knows exactly how much is earned; this is the City Councils job - to study and know how to save taxpayer funds. Because golf courses are expensive to run and there is a lot of competition, the City needs to look at ways to save money. She suggested the City take over the tournaments, pro shops and snack bars and hire a private company to audit the courses every three months and study other cities that have taken back the pro shops and snack bars to see how it has worked for them and perform an audit on how much the pros are making.

City Manager Gary Esplin replied that the City can audit the amount of dollars generated on a gross basis, but profit-wise it is not the Citys business to determine whether the pros are making a profit and what that percentage is. He commented that he appreciated the extensive research performed by Councilmember Shakespeare, but he did not believe St. George could be compared to courses in Sandy and Murray, as not one other city in the state uses its golf courses for economic development, but rather for recreation. The City of St. George operates its golf courses strictly for economic development purposes. The golf season in St. George is completely different from that in other parts of the state. The yearly total paid to all four pros is $474,000 to operate all four courses. With that amount they have to pay all their help. The City can change to another model, but that amount is going to cost the City. If the pros and all their help were made City employees, it would cost $742,000 to operate all four courses, when the City is already losing money on them. This will immediately cost the City $250,000 more to operate the courses, which is more than the City can make in the pro shops and snack bars.

Mayor McArthur advised the City studied this issue four or five years ago, and came to the same conclusion - that it would take $250,000 more to operate the courses if the pros and their help were made City employees.

Councilmember Shakespeare commented that not all the courses have assistant pros and the help is being paid minimum wage. The courses can still be used for economic development, as they are not going anywhere. The issue that needs to be examined is if the money going through the pro shops and snack bars should belong to the

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City. An audit of the courses should be performed and compared to what is happening in other cities.

City Manager Gary Esplin replied that he knows all the golf operations in the state, and in his professional opinion the City should not be in competition with private enterprise. The City is working with the pros on paying a greens fee for those times when tournaments are taking up space the City could sell. The City is not afraid of an audit.

Councilmember Almquist commented his concern is what the City is doing to get more people to golf, and how the pros and golf maintenance people get along.

City Manager Gary Esplin replied that the relationship between the pros and superintendents could be better, but the courses are in the best shape ever. However, the City is facing serious problems in the future because it has not funded any capital improvements for the courses. The National Golf Foundation notes a 20% decrease in golfers the last few years because of the dilution of demand and the economy. In the last ten years many courses have closed and it is estimated that in the next five years between 500-1000 public golf courses will close. It is a national problem. The City can do a better job of marketing the courses. The golf course business is risky enough without taking on more risk.

Ed Baca commented that the reality is that the golf courses are an economic-driven engine. St. George is unique and cannot be compared to northern cities.

Councilmember Shakespeare inquired about splitting profits of the pro shops and snack bars between the City and pros. In that event the City would be in a position to know what they bring in.

Councilmember Almquist commented he did not think he was willing to spend $250,000 to break even.

Finance Director Phil Peterson commented the City has been staunch in its model of not competing with private industry, and in his opinion having pros to share the risk is also an internal control, as the pro has to the watch the Citys money as well as his own.

Councilmember Almquist commented he was not in favor of making government any bigger.

Councilmember Pike inquired of Finance Director Phil Peterson and Budget and Financial Planning Manager Deanna Brklacich if there was any scenario that would make sense in order for the City to change its model.

Finance Director Phil Peterson commented that the pros are an extra set of eyes watching over the courses, as the golf courses are their livelihood too.

Budget and Financial Planning Manager Deanna Brklacich commented that she has run through the numbers forwards and backwards for rounds, greens fees, and cart

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fees at every course, and the only concern she has is that somehow the City needs to include the economic factor the golf courses create and bring to the area.

Councilmember Bunker commented that to her the bottom line is the $250,000 that would have to be gambled. She stated that her experience in retail tells her the pros could not possibly be making that much money on the pro shops. While she appreciates very much what Councilmember Shakespeare has done, her confidence in the City Manager tells her that if there were a better way to run the courses, Mr. Esplin would have done so.

Councilmember Pike commented that if there was not a budget pro forma which shows a better way to run the courses, it should be left the way it is.

Councilmember Almquist commented that the numbers show that the City has not lost more than 10% of the number of people golfing, and has never suffered a 10% loss in numbers over any year.

Councilmember Bunker commented she was concerned about ending up with an entire block of secondhand or consignment shops which has the potential of eventually looking seedy. This has happened in the Las Vegas area. She suggested a certain length of spacing between them.

Bob Nicholson commented that maintenance is a common issue for every business.

Councilmember Pike commented the City cannot force a business to remodel.

A woman representing Coyote Exchange commented that she would like to set a standard for these types of businesses. Her merchandise is 50-75% new and she is not a thrift store.

City Manager Gary Esplin suggested since Coyote Exchange sells 50% or more new merchandise, it should be allowed to go forward.

Councilmember Almquist expressed concern that a store more relative to a pawn shop not morph into something else, such as a non-collateralized loan store or tattoo parlor, especially in the Historic District.

City Planner Ray Snyder commented if the City can re-categorize Coyote Exchange as being predominantly new retail, then the owner can proceed with her license.

City Manager Gary Esplin advised that standards are needed for consignment, pawn and check cashing stores. He stated he felt that Coyote Exchange would be a great addition to the downtown. Payday loan and check cashing stores are the problems.

Councilmember Shakespeare suggested the uses should be well defined for protection of the area.

City Planner Ray Snyder distributed handouts of cities which regulate payday lenders and a list of payday lender ordinances.
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Bruce Bennett and Dan Olson, representing the St. George Musical Theater, distributed handouts. They advised they would like to use the Venuti or Above View hangars at the old airport for productions.

Mayor McArthur replied that the only uses allowed at the old airport are temporary uses, and he did not know how the City could commit to a long term use.

City Manager Gary Esplin commented his biggest concern is if the St. George Musical Theater put money into a building at the old airport and the building subsequently had to be knocked down or removed. He suggested use of the Opera House with a one year lease.

Mr. Bennett replied the Opera House is too small. He advised the Diamond Talent building is more suited for productions, but they cannot guarantee the rent the landlord wants. He stated he was reluctant to ask the community for funds and is trying to resurrect the production company with private donations.

Discussion was held on what the City could do to help the St. George Musical Theater guarantee its first year lease. A meeting was suggested with the landlord.

The meeting then adjourned.

Gay Cragun, City Recorder .