CITY OF COSTA MESA
Department of Public Works and Finance Department
MEMORANDUM
TO: MAYOR AND CITY COUNCIL
FROM: RAJA SETHURAMAN, PUBLIC WORKS DIRECTOR
CAROL MOLINA, FINANCE DIRECTOR
DATE: MAY 6, 2025
SUBJECT: COSTA MESA COUNTRY CLUB REVENUES AND EXPENDITURES At the April 22, 2025 City Council Study Session, Mayor Stephens requested information on historical revenues and expenditures, as we ll as golf course green fees for the City- owned Cos
ta Mesa Country Club. This info rmation was requested due to consideration of reductions in the Capita l Improvement Project (CIP) budget related to Costa Mesa Country Club. At the May 6, 2025 City Council meeting, st aff will be presenting an item related to CIP deferrals needed to address the FY 2024-25 estimated budget shortfall.
One of the proposed alternatives includes th e reduction of $400,000 in the Costa Mesa Country Club Modernization project, leaving $350,000; and the reduction of an additional $500,000 in the Golf Course and Tennis C enter Improvements project leaving approximately, $490,000.
The following table provides a revenue breakdown for the Costa Mesa Country Club over the past six (6) years:
Fiscal
Year
Gross Total
Revenues
Gross
Green
Fees
Subtotal
Golf Course
Revenues*
Mesa Verde
Partners
City
General
Fund
Golf Course
Improvement
Fund^
2018-19 $7,589,411 $4,116,000 $3,472,8 11 $5,477,829 $2,230,891 $102,915 2019-20 $7,505,575 $4,350,350 $3,155,2 25 $5,348,315 $2,237,608 $108,759 2020-21 $10,793,401 $6,548,594 $4,244,8 07 $7,397,641 $3,526,236 $163,715 2021-22 $10,748,839 $6,250,815 $4,228,0 24 $7,404,334 $3,470,925 $163,020 2022-23 $10,416,063 $6,387,815 $4,028,2 48 $7,189,405 $3,349,260 $159,695 2023-24 $11,619,106 $7,177,717 $4,441,3 89 $8,026,785 $3,707,708 $169,771 *Not including the Green Fees
^2.5% of Green Fees
Over the past ten (10) year s, the total expenditures from the Golf Course Fund (Fund 413) is approximately $956,560, for various improvements within the Costa Mesa Country Club property.
At the Study Session, the Mayor also requested inform ation on action prev iously taken by City Council to reduce the five percent (5%) CIP allocation to the Golf Course Fund to
2.5%. This action was taken by City Council on June 16, 2009.
If you have any questions, please contact Finance Director Carol Molina or myself.
City Council
May 6, 2025
FISCAL YEAR 2024-25
CIP PROJECT DEFERRALS
2 FY 2024-25 ADOPTED BUDGET
All Funds % General Fund %
Salaries & Benefits $133,130,777 59% $133,130,777 70%
Maintenance &
Operations 52,189,891 22% 44,132,090 23%
Fixed Assets 6,781,618 3% 2,925,298 2%
Transfers Out 12,631,498 5% 9,705,994 5%
Capital Projects 27,901,236 11% - -
Total $239,815,342 100% $189,894,159 100%
Expenditure Category
3 FY 2024-25 GENERAL FUND BUDGET REDUCTIONS
• Fiscal Year 2024-25 General Fund expenditure budget to be reduced by $3.6M to address estimated revenue shortfall. • Proposed reductions include:
o$0.7M in operating budget reduction utilizing Gas Tax for street sweeping services, and
o$2.9M deferrals of approved capital projects
4 INITIALLY PROPOSED
FY 2024-25 CIP DEFERRALS
No. Project Name Deferred Amount
1 City Hall Cast Iron Drain Repipe $254,019
2 Finance Security/Efficiency Remodel $250,000
3 Citywide Community Choice Energy Study $150,000
4 City Hall 5th Floor Air Handler Replacement $140,000
5 City Hall Breezeway Roof $245,000
6 City Hall Heater(s) Replacement $350,000
7 Westside Restoration Project $450,000
8 Parkway Maintenance Program Citywide $233,757
9 Costa Mesa Country Club Modernization $400,000
10 Butterfly Gardens $100,000
Savings from Completed Projects $300,000
Ongoing Capital Improvement Projects for Fund Deferral $2,872,776 5 5
FiPAC RECOMMENDATION
• FiPAC made following recommendations at April 9, 2025 meeting:
o Support Emergency Exception of the CAN ordinance for FY 2024-25. o Support proposed projects for deferral, except for the following:
City Hall Cast Iron Drain Repipe $254,019
City Hall 5th Floor Air Handler Replacement $140,000
City Hall Heater(s) Replacement $350,000
o Staff to recommend alternative reductions for Council consideration. o Deferred action on FY 2025-26 CIP to May 2025 for consideration along with the Operating Budget.
6 ALTERNATIVE CIP DEFERRALS FOR
CONSIDERATION
No. Project Name Deferred Amount
1 City Hall Cast Iron Drain Repipe $ 254,019 2 Finance Security/Efficiency Remodel $ 250,000 3 Sewer Line Improvement $ 250,000
4 Citywide Community Choice Energy Study $ 150,000 5 City Hall Breezeway Roof $ 245,000
6 Westside Restoration Project $ 450,000 7 Parkway Maintenance Program Citywide $ 233,757 8 Costa Mesa Country Club Modernization $ 400,000 9 Butterfly Gardens $ 100,000
10 Senior Center Improvements $ 250,000 Savings from Completed Projects $ 300,000 Alternative Proposal $ 2,882,776
7 7
CITY COUNCIL STUDY SESSION
• Alternative list of deferral projects was presented to City Council at the April 22, 2025 Study Session.
• The following input was received from Councilmembers:
o Remove the following projects from the deferral list:
Sewer Line Improvement $250,000
Senior Center Improvements $250,000
o Golf Course & Tennis Center Improvements project has funding available for deferral.
o Golf Course is a City-owned, revenue-generating facility requiring improvements to both the golf course grounds and clubhouse.
8 REVISED ALTERNATIVE CIP
DEFERRALS FOR CONSIDERATION
No. Project Name Deferred Amount
1 City Hall Cast Iron Drain Repipe 254,019$
2 Finance Security/Efficiency. Remodel 250,000$
3 Citywide Community Choice Energy Study 150,000$
4 City Hall Breezeway Roof 245,000$
5 Westside Restoration Project 450,000$
6 Parkway Maintenance Program Citywide 233,757$
7 Costa Mesa Country Club Modernization (General Fund portion) 400,000$ 8 Butterfly Gardens 100,000$
9 Golf Course & Tennis Center Improvements 500,000$
Savings from Completed Projects 300,000$
Revised Alternative Ongoing CIP Projects for Fund Deferral 2,882,776$ 9 9
*Staff recommendation
DEFERRAL ALTERNATIVES SUMMARY
No. Proposed Project to be Deferred Original Alternative 2 Alternative 3 1 City Hall Cast Iron Drain Repipe 254,019$ 254,019$ 254,019$ 2 Finance Security/Efficiency Remodel 250,000$ 250,000$ 250,000$ 3 Citywide Community Choice Energy Study 150,000$ 150,000$ 150,000$ 4 City Hall 5th Floor Air Handler Replacement 140,000$ -$ -$ 5 City Hall Breezeway Roof 245,000$ 245,000$ 245,000$ 6 City Hall Heater(s) Replacement 350,000$ -$ -$ 7 Westside Restoration Project 450,000$ 450,000$ 450,000$ 8 Parkway Maintenance Program Citywide 233,757$ 233,757$ 233,757$ 9 Costa Mesa Country Club Modernization 400,000$ 400,000$ 400,000$ 10 Butterfly Gardens 100,000$ 100,000$ 100,000$ 11 Sewer Line Improvement Project -$ 250,000$ -$ 12 Senior Center Improvements -$ 250,000$ -$ 13 Golf Course & Tennis Center Improvements -$ -$ 500,000$ Savings from Completed Projects 300,000$ 300,000$ 300,000$ Total Proposed Deferral 2,872,776$ 2,882,776$ 2,882,776$ 10 NEXT STEPS
• The City’s Municipal Code Section § 2-209 Capital
Asset Needs Reserve requirement states that the
City shall allocate a minimum of five percent (5%) of
the annual General Fund revenue towards the
capital asset account (Fund 401).
• Staff is requesting Emergency Exception
authorization as per Section 2-213(1)(b) to address
the FY 2024-
25 potential revenue shortfall due to the
economic downturn.
11 RECOMMENDED ACTIONS
1. Authorize the “Emergency Exception” clause of the Capital Asset Needs Ordinance under Section 2-2131(b), Economic Downturn, for Fiscal Year 2024-25.
2. Provide direction on which approved projects may be
deferred to help address the General Fund revenue shortfall resulting from the current economic downturn.
3. Approve a financial plan to reinstate the $2.9 million in deferred projects by: prioritizing funding in FY 2025-26 if revenues exceed expectations, and if needed, reinstate the funding over a 10-year period for fiscal years that revenues exceed expenditures to ensure a fiscally sustainable General Fund budget.
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12 Questions?