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HomeMy WebLinkAbout08315ORDINANCE NO. 8315 AN ORDINANCE AMENDING THE CITY OF PUEBLO 2011 BUDGET FOR THE WALKING STICK GOLF COURSE ENTERPRISE FUND BY BUDGETING AND APPROPRIATING OPERATING AND CAPITAL OUTLAY FUNDS FOR THE OPERATION OF THE WALKING STICK GOLF COURSE RESTAURANT WHEREAS, as of January 1, 2011, the Walking Stick Golf Course Restaurant and Lounge has been without a contractor to operate and manage the facility; and WHEREAS, a proposal was submitted to Parks and Recreation Director by the current Walking Stick Golf Pro (On In 2, Inc.) to occupy, manage, operate and maintain the Walking Stick Golf Course Restaurant and Lounge; and WHEREAS, for the Walking Stick Enterprise Fund to take over operation of the restaurant and lounge, appropriation for the operating and capital outlay budget as well as the estimated revenues to be generated will require an amendment to the 2011 Walking Stick Golf Course Enterprise Fund; now therefore, BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1 The estimated revenues of the Walking Stick Golf Course Enterprise Fund, is hereby increased by $327,000 for sales generated at the restaurant, lounge and certain premises. SECTION 2 In addition to the amounts already appropriated in the 2011 operating budget of the Walking Stick Golf Course Enterprise Fund, the amount of $327,000 is hereby budgeted and appropriated thereto. SECTION 3 This ordinance shall become effective immediately upon final passage and approval. INTRODUCED: February 14, 2011 BY: Leroy Garcia COUNCILPERSON PASSED AND APROVED: February 28, 2011 Background Paper for Proposed ORDINANCE AGENDA ITEM # R-3 February 14, 2011 DATE: DEPARTMENT: PARKS AND RECREATION, CREIGHTON WRIGHT, DIRECTOR CITY MANAGER’S OFFICE, JERRY PACHECO, CITY MANAGER FINANCE DEPARTMENT, SAM AZAD, DIRECTOR TITLE AN ORDINANCE AMENDING THE CITY OF PUEBLO 2011 BUDGET FOR THE WALKING STICK GOLF COURSE ENTERPRISE FUND BY BUDGETING AND APPROPRIATING OPERATING AND CAPITAL OUTLAY FUNDS FOR THE OPERATION OF THE WALKING STICK GOLF COURSE RESTAURANT ISSUE Should City Council increase the 2011 operating, capital outlay and revenue budgets for the Walking Stick Golf Course Enterprise to cover expenses in the operation and management of the Walking Stick Golf Course Restaurant and Lounge? RECOMMENDATION Approval of the Ordinance. BACKGROUND The contractor responsible for the operation and management of the Walking Stick Golf Course Restaurant and Lounge terminated his contract effective January 1, 2011. His reasoning for terminating the contract was due to the amount of time it actually took to operate a restaurant, especially a destination restaurant such as Walking Stick. Lack of marketing resources, inconsistent cash-flow, and the success of the restaurant tied to the golfers and the weather were some of the issues as to why this restaurant has been such a challenge. In December 2010, an RFP was advertised for a new contractor to take over the operation and management of the restaurant and lounge, but unfortunately the only two bidders that submitted quotes were both disqualified. In an effort to keep the restaurant and lounge in operation for the 2011 season, Walking Stick Golf Pro, Dave Lewis submitted a proposal to operate and manage the restaurant and lounge similar to the way he currently manages the golf course. Mr. Lewis has experience operating a golf course restaurant at Desert Hawk Golf Course. In order to fund the additional operating and capital outlay expenses to keep the Walking Stick Golf Course restaurant in operation, the 2011 adopted Walking Stick Golf Course budget will have to be amended. Revenue from the restaurant and lounge is expected to cover all operating expenses associated with operating the golf course restaurant. FINANCIAL IMPACT The total cost of operating the Walking Stick Golf Course Restaurant and Lounge for the balance of the 2011 season is estimated to be $327,000. Estimated revenues from the restaurant, lounge and the optional premises is expected to be $292,000. This is based on revenue history from 2009 provided by former restaurant contractor. Capital Outlay expenses anticipated to purchase needed equipment and furnishings is $35,000. It is our expectation that the Walking Stick Enterprise is expecting a positive cash flow at the end of year one of between $40,000 and $50,000 between renovations and equipment purchases for the restaurant and lounge.