Manteca Park Municipal Golf Course
Golf Course Fee Study
Manteca, California
Prepared for: City of Manteca
Prepared by: Pro Forma Advisors, LLC
Jetter Golf
November 2021
PFAID: 11-462
Version: 1.2
Pro Forma Advisors, LLC Los Angeles T 310.616.5079 New York Metro T 203.604.9007 F 888.696.9716 www.ProFormaAdvisors.com ATTACHMENT 3
Table of Contents
General Limiting Conditions 4
I. Introduction 5
II. Summary of Findings 6
Background and Operating History 6
Golf Fees and Revenue 7
City Obligations 8
Revenue Enhancement/Cost Savings 8
Projected City Performance 10
III. Background and Operating History 12
Property Description 12
Current Concessionaire Agreements 13
Historical Operating Performance 14
Golf Course Maintenance 25
Concession Revenue 25
IV. Capital Improvements 27
Maintenance Equipment 28
Future Capital Improvement Requirements 28
Total Capital Improvement Cost and Annual Funding 33
V. Market Overview 35
National Golf Market Overview 35
Regional Golf Market 38
Local Golf Market 38
COVID-19 48
Table of Contents
Pro Forma Advisors, LLC Los Angeles T 310.616.5079 New York Metro T 203.604.9007 F 888.696.9716 www.ProFormaAdvisors.com VI. Operating Economics 50
Revenue Enhancement 50
Gross Revenue Projection 51
City Obligations 52
City Net Operating Income 55
Table of Contents
Pro Forma Advisors, LLC Los Angeles T 310.616.5079 New York Metro T 203.604.9007 F 888.696.9716 www.ProFormaAdvisors.com General Limiting Conditions
Certain information included in this report contains forward-looking estimates, projections and/or statements.
Pro Forma Advisors LLC has based these projections, estimates and/or statements on expected future events. These forward-looking items include statements that reflect our existing beliefs and knowledge regarding the operating environment, existing trends, existing plans, objectives, goals, expectations, anticipations, results of operations, future performance and business plans.
Further, statements that include the words "may," "could," "should," "would," "believe," "expect," "anticipate," "estimate," "intend," "plan," “project,” or other words or expressions of similar meaning have been utilized.
These statements reflect our judgment on the date they are made and we undertake no duty to update such statements in the future.
No warranty or representation is made by Pro Forma Advisors that any of the projected values or results contained in this study will actually be achieved.
Although we believe that the expectations in these reports are reasonable, any or all of the estimates or projections in this report may prove to be incorrect. To the extent possible, we have attempted to verify and confirm estimates and assumptions used in this analysis. However, some assumptions inevitably will not materialize as a result of inaccurate assumptions or as a consequence of known or unknown risks and uncertainties and unanticipated events and circumstances, which may occur. Consequently, actual results achieved during the period covered by our analysis will vary from our estimates and the variations may be material. As such, Pro Forma Advisors accepts no liability in relation to the estimates provided herein.
In the production of this report, Pro Forma Advisors has served solely in the capacity of consultant and Pro Forma Advisors has not rendered any “expert” opinions and does not hold itself out as an “expert” (as the term “expert” is defined in Section 11 of the Securities Act of 1933).
This report is not to be used in conjunction with any public or private offering of securities, and may not be relied upon without the express written consent of Pro Forma Advisors.
This study is qualified in its entirety by, and should be considered in light of, these limitations, conditions, and considerations.
Limiting Conditions
Pro Forma Advisors, LLC Los Angeles T 310.616.5079 New York Metro T 203.604.9007 F 888.696.9716 www.ProFormaAdvisors.com I. Introduction
Manteca Park Golf Course is an 18-hole regulation length municipal golf course owned by the City of Manteca and operated as an “enterprise fund.” The 18-hole municipal golf course is operated by a golf course concessionaire (Central Golf Company), with Guinta Enterprises serving as the food and beverage concessionaire. City Public Works Department staff maintain the golf course and clubhouse facilities. The City historically has subsidized the golf course through General Fund transfers in part to provide reasonable fees for City residents. Prior to the onset of COVID-19, the City’s operating expenses exceeded revenues over the 2018-2020 period by about $100,000 to $200,000 annually, before consideration of maintenance equipment replacement costs and reserves for capital improvement needs.
Over the last three years, the City implemented substantial greens fees increases which has reduced, but not eliminated, the subsidy. As with virtually all public golf courses, Manteca Park has benefitted from COVID-19, with play levels up substantially, and the average effective greens fee increasing somewhat. The lasting impact of COViD is difficult to predict, although most analysts believe there will be at least some modest positive sustained benefit.
This fee study evaluates the current golf course fee structure relative to the Manteca Park Golf Course product, market conditions, and City obligations and objectives. As well, golf course expenditures are examined relative to industry norms and the specific circumstances related to Manteca Park.
Manteca Park Golf Course, like most public golf courses, will face substantial capital improvement needs in the years ahead. Currently, there is no funding mechanism in place for meeting these needed improvements.
An important component of this study addresses the mid- and long-term capital improvement requirements, prioritizes these improvements and, most importantly, offers potential funding mechanisms.
A series of tasks has been completed during the course of this study, including:
‣ Interviews with City officials.
‣ Review of current operating agreements.
‣ Interviews with the concessionaires and City maintenance supervisor. ‣ Review of the historical performance of Manteca Park Golf Course. ‣ Overview evaluation of Central Valley golf market.
‣ Inspection of the Golf Course and assessment of future capital improvement needs. ‣ Review of selected concessionaire agreements for comparable facilities.
Following this introduction, Section II presents a summary of key findings and conclusions. Sections III through VI present analysis and documentation of these findings.
Introduction
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II. Summary of Findings
A summary of key findings is presented below, with more complete documentation contained in subsequent sections of the report.
Background and Operating History
‣ Manteca Park Golf Course is a municipal golf complex providing a quality golf experience at a relatively affordable fee.
‣ Golf operations and food and beverage services are provided by independent concessionaires. The course is maintained by the City’s Public Works Department. ‣ The course, given its position in the market, is very well maintained and the golfer service level is relatively high, particularly in light of the course’s market positioning. ‣ In FY2021, the golf course generated approximately 73,000 rounds, consisting of about 49,000 daily fee rounds and 24,000 monthly passholder rounds. Total play is up sharply from about 50,000 annual rounds in FY2020 due to the beneficial impact of COVID-19 on golf participation and play, and compares to peak levels of 75,000-80,000 rounds annually generated in the 1990s. ‣ Course maintenance is provided by a staff of 7.5 full-time-equivalent employees. This is regarded as at, or perhaps somewhat below, the minimum level required to maintain playable and quality course conditions.
‣ From the City’s perspective, net operating income for FY2020 and FY2021, before depreciation, capital expenditures, and City subsidies, is reported as follows:
Summary
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Table II-1: City of Manteca Golf Course Net Operating Income 1/ (thousands of dollars)
FY2020 FY2021
City Revenue
Greens Fees (100%)/Passholder Fees $913.4 $1,417.4
Golf Concession Rent $72.5 $137.8
Restaurant Lease $64.7 $62.9
Other Miscellaneous Revenue $26.0 $29.8
Total $1,076.6 $1,647.9
City Obligations
Operating Expenses 1,147.5 1,437.0
Maintenance Equipment Repl. Reserve --- ---
CIP Reserve --- ---
Total $1,147.5 $1,437.0
City Net Income (loss)1/ ($70.9) $210.9
1/ Excludes depreciation, capital expenditures, and subsidies ‣ As noted, City net income is reported before depreciation, maintenance equipment replacement costs, capital improvement reserves, and any City subsidies.
‣ Golf, as one of the few available outdoor recreation options during COVID-19, has benefited substantially from the pandemic. Manteca Park’s annual play increased by roughly 40 percent in FY2021, much greater than the industrywide impact which has averaged about 25 percent. This better-than-average performance at Manteca Park is due to several factors. Over the past several years, Manteca has offered a noticeably improved product (maintenance and golfer service level improvement), the course has had available capacity to accommodate the surge in play, and the course benefited from more non-regional golfer play, particularly from the San Francisco/Oakland East Bay.
Golf Fees and Revenue
‣ Daily fee greens fees (rates) at Manteca Park have increased approximately 30 percent over the past four years, bringing them generally in-line with comparable courses in the region, although near the lower end of the competitive range and well below that observed in the San Francisco-Oakland East Summary
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Bay. At the same time, monthly pass fees have been increased by 35-40 percent over the same period, although they remain somewhat below market levels. The overall average golf fee (daily fee and passholder play) per round has increased from $15.33 in 2018 to $19.45 currently. Greens fees and passholder monthly revenue for FY2021 are reported as follows:
Annual Revenue Average per Round
Greens Fees $1,180,000 $23.96
Passholder Monthly Fees 242,800 10.16
Total/Average $1,422,800 $19.45
‣ Clearly, Manteca Park’s average revenue per monthly passholder round, at $10.16, is very low.
Passholders account for about one-third of total play, but only 17 percent of total greens fees revenue. ‣ Average per round cart, range, merchandise, and food and beverage revenues, given the play levels and positioning of the course, are consistent with similarly positioned municipal golf courses.
City Obligations
‣ The reported City net income, shown above, is misleading to the extent that there are several important City obligations which are not included. While City operating expenses are shown, there is no allowance for the periodic replacement of golf course maintenance equipment and there is no capital improvement program reserve. These additional obligations, plus a very modest increase in golf course maintenance resources, total about $300,000 per year. - Maintenance Equipment--An annual allowance of approximately $75,000 is required to fund the ongoing periodic replacement of aging maintenance equipment. - Capital Improvement Replacement Reserve--While the Manteca Park golf complex has benefited from a continuous capital improvements program and construction of a new clubhouse in 1989, significant capital improvements will be needed going forward. An illustrative capital improvements plan has been prepared which identifies nearly $4 million in capital improvements required over the next 20-25 years, an average of $150,000-$200,000 per year (constant 2021 dollars). - Golf Course Maintenance Resources--A very modest increase in golf course maintenance resources (adding one full-time maintenance position) is needed to sustain desirable course conditions, costing $50,000 to $75,000 per year.
Revenue Enhancement/Cost Savings
‣ Greens fees and monthly passholder sales are by far the most important sources of revenue for the golf course (and City), representing nearly 60 percent of total golf course revenue and 85 percent of City revenue. Greens fees revenue is the product of the greens fees and play levels. The current fee Summary
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structure at Manteca Park is considered close to market. Prior to the onset of COVID-19, play levels were consistent with similarly positioned regional courses, but well below optimal capacity. With COVID-19, play levels in FY2021approached effective capacity. ‣ There are a number of potential measures which would likely enhance revenues and/or reduce operating costs at Manteca Park.
Resident Discount Cards: Currently, residents do not need to show documentation that they reside in the City of Manteca and thus are entitled to greens fees discounts. It is appropriate to introduce a formal annual identification card for residents which needs to be presented at the pro shop counter to receive the discounted fee. It is estimated that this may result in an increase in nonresident greens fees of as much as $10,000 per year.
Greens Fees: Greens fees revenue is the product of the greens fees (rate) and play levels. As the result of sharp increases in rates in recent years, the current greens fees structure at Manteca Park is considered close to market, yielding an average daily fee greens fees of about $24 per round in FY2021. At this time, it appears that the market will bear a slight one-time increase in greens fees which, in effect, will generate additional funds for ongoing needed capital improvements. A one-time increase of $2 for all 18-hole rounds, and $1 for 9-hole and twilight play is recommended. Junior and military rates would remain unchanged. The alternative to increasing greens fees directly would be to introduce a “capital improvements surcharge” of $2 per 18-hole and $1 per 9-hole and twilight round.
Monthly Passes: Monthly passes, which allow unlimited play on weekdays, are available to adults and seniors at between $99 and $139 per month, depending on resident status and age. Based on current passholder play levels, the average passholder revenue per round is calculated at $10.16, compared with $23.96 for daily fee play. While passholders are a loyal and consistent source of revenue, the question of equity compared with daily fee players may need to be addressed.
There are a number of changes to the monthly pass program which should be considered, including the following modifications:
- Increase the monthly pass fees approximately 20 percent ($20 per month) to bring them more inline with monthly pass fees charged at similar courses in the Central Valley; - Convert the monthly pass into an annual pass, even at a slight discount from the cost of 12 consecutive monthly passes;
- Reduce the monthly pass fee by $20 to $25 per month, while adding a $5 per round weekday greens fee surcharge (the course currently allows passholder play on weekends with a $17 surcharge).
Increasing the pass fees by $20 per month is the most straight forward approach, and may be the method most tolerated by golfers.
Summary
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Concession Agreements: While the golf concession agreement has been reasonably equitable with regard to revenue sharing and providing incentives to promote play, the surge in golf play and golf revenues related to COVID-19 created substantial windfall gains for the golf concessionaire.
Restructuring the golf concession agreement to minimize windfall gains, while still providing fair compensation to the concessionaire with appropriate incentives, should be pursued. A cap on overall golf concessionaire compensation would be one method of achieving this objective.
At the same time, the structure of the food and beverage concessionaire agreement created some hardship during the pandemic, and should also be restructured with concession rent based on a percentage of gross revenue.
Projected City Performance
‣ At the current greens fees structure and current golf course utilization (73,000 rounds per year), there is sufficient City revenue to fund all operating expenses, annual reserves for golf course maintenance equipment, and a golf course/clubhouse capital improvement reserve fund, without implementing revenue enhancement/cost reduction measures.
‣ However, if golf play substantially declines from the current COVID-19 peak level achieved in FY2021, net income would be insufficient to fund all of the golf course obligations, thus requiring an annual subsidy. The amount of the subsidy would depend on the extent of the contraction in play. ‣ It is impossible to predict where play levels at Manteca Park stabilize following full resolution of COVID-19, although it is likely that there will be substantial, but not complete, erosion from recent peak levels.
‣ Even if play levels contract from their current peak, implementation of a series of measures, as noted above, would substantially reduce or eliminate the annual subsidy. ‣ Based on projected City revenue and obligations, City stable year annual net operating income, expressed in constant FY2021 dollars, is presented in Table II-2. As noted, obligations include operating expenses, an annual allowance for maintenance equipment replacement, and an annual replacement reserve for golf course and clubhouse capital improvements.
Summary
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Table II-2: Summary of Projected Stable Year Golf Net Operating Income (thousands of constant 2021 dollars)
Actual Projected
FY2020
(51,880
rounds)
FY2021
(73,160
rounds)
55,000
Rounds
60,000
Rounds
65,000
Rounds
70,000
Rounds
City Revenue $1,076.6 $1,647.9 $1,360.6 $1,460.5 $1,587.4 $1,700.7 City Obligations
Operating Expenses $1,147.5 $1,437.0 $1,407.8 $1,425.0 $1,425.0 $1,425.0 Maint. Equipment Repl. --- --- 75.0 75.0 75.0 75.0
CIP Reserve --- --- 150.0 150.0 150.0 150.0
Total $1,147.5 $1,437.0 $1,632.8 $1,650.0 $1,650.0 $1,650.0 City Net Income ($70.9)1/ $210.91/ ($272.2) ($189.5) ($62.6) $50.7 1/ Values for FY2020 and FY2021 are shown before maintenance equipment replacement costs and a capital improvement program replacement reserve.
‣ In fiscal years 2020 and 2021, City net income did not include an allowance for maintenance equipment replacement and a capital improvement program (CIP) reserve. Had appropriate allowances been included for these obligations, the net deficit in FY2020 would have exceeded $300,000, with FY2021 showing a balanced fiscal condition. ‣ Going forward, assuming implementation of a number of revenue enhancement/cost reduction measures, the deficit/surplus will be a function of stable year play levels after COVID-19 dissipates. At various stabilized play levels, the annual subsidy ranges from about $270,000 at 55,000 rounds to a surplus of $50,000 at 70,000 rounds.
Summary
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III. Background and Operating History
The following section presents a description of the golf complex, documents the current concessionaire agreements, and reviews historical performance of the course.
Property Description
The Manteca Park Golf Course is a well designed parkland style 18-hole regulation length municipal golf course. The initial nine holes opened in 1966, with the second nine added in 1979. The golf course is a par 72 layout, with four sets of tees, and was designed by Jack Fleming, a highly regarded architect who designed numerous golf courses in the region.
The course length, rating and slope from each tee is as follows:
Length
(yards)
Slope Course
Rating Tee
Length
(yards)
Slope Course
Rating
Blue 6,418 121 71.3
White 6,035 117/1301/ 69.7/74.51/
Red 5,538 113/1211/ 66.5/71.31/
Gold 4,894 106/1161/ 64.1/68.61/
1. Men’s/Women’s slope and rating.
The golf course has limited topography, but benefits from a desirable routing, generous landing areas, and mature tree cover. There are six lakes on the golf course which create interest and serve as an integral part of the golf course irrigation system. Both the front and back nines are par 36 with two par-3, five par-4, and two par-5 holes.
The golf practice range is located north of the clubhouse, and is oriented in a desirable south-north direction.
There are 14 tee stations – all artificial turf mats. The range is not lighted. The landing area is well maintained natural turf, with several elevated target greens.
There is storage for 80 electric carts in a pre-fabricated metal structure located on the south side of the clubhouse. The maintenance complex is adjacent to the cart storage structure.
The two-level clubhouse, approximately 13,000 square feet, was constructed in 1989. The lower level contains the pro shop, snack bar, a small office area, and modest size men’s and women’s lockers. The upper level is designed with two function rooms and a kitchen. One of the rooms is approximately 3,000 square feet (capacity for groups of up to 185 attendees) and the second room about 1,000 square feet (capacity for groups of about 50 attendees).
Background/Operating History
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Current Concessionaire Agreements
Golf course operations (reservations, starting, greens fees collection, cart rentals, driving range, pro shop merchandise, lessons, and other miscellaneous golfer services) are provided by a golf operations concessionaire. Food and beverage services also are provided by a concessionaire. The City, through its Public Works Department, is responsible for golf course maintenance and clubhouse maintenance.
Golf Operations Concession
The current agreement is summarized as follows:
Lessor: City of Manteca
Lessee: Central Golf Company
Commencement Date: August 1, 2017
Expiration Date: July 31, 2020
Options: One 2-year extension
Discretion: City & Professional
Minimum Rent: $50,000 per year
Adjustments: Year 4: Greater of $50,000 or 75% of prior 3-year average percentage rent Service Fee Paid to Concessionaire by City (percent of greens fees/passholder revenue):
0-$800,000: 10%
>$800,000 20%
Percentage Rent Paid to City by Concessionaire (percent of gross revenue):
Cart Rentals 0-$425,000 12%
>$425,000 20%
Range Fees 0-$75,000 10%
>$75,000 20%
Merchandise all 5%
Lessons all 5%
Other/Miscellaneous all 10%
Capital Investment: None
Utilities: Lessee – Pro Rata Share
Food and Beverage Concession
The current agreement is summarized as follows:
Lessor: City of Manteca
Background/Operating History
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Lessee: Guinta Enterprises, Inc.
Commencement: September 1, 2002
Term: 10 Years
Options: Two 5-Year
Discretion: Lessee
Minimum Rent – Snack Bar:
Year 1 $19,200
Year 2+ Prior Year + 2%
Minimum Rent – Banquet
Years 1-8 $31,200 per year
Year 9+ Prior Year + 2%
Utilities: Lessee – Pro Rata Share
Maintenance: Lessee
HVAC, Tenant Imp.
Repairs & Maintenance: Lessee
Historical Operating Performance
Manteca Park Golf Course is a public access, 18-hole regulation length golf course. Play is available on a daily fee basis, with residents, seniors, and juniors eligible for modest greens fees discounts. As well, the City offers a monthly pass which allows unlimited play on weekdays (weekend play is available to passholders for a $17 per round surcharge). Historical play characteristics and rate structure are summarized in Tables III-1 through III-6.
Key observations are highlighted below:
‣ Play levels peaked at slightly above 80,000 in the early- to mid-1990s. From FY2010 through FY2020, annual play at Manteca Park, comprised of daily fee play and monthly passholder play, declined steadily from about 62,000 rounds to about 51,800. In FY2021, due to the beneficial impact of COVID-19 on outdoor recreation, and golf in particular, play jumped to just over 73,000 rounds, a surprising 40 percent increase.
‣ Most of the historical decline in play was attributable to daily fee golfers, with passholder play remaining relatively stable. For example, over the FY2010-FY2020 period, passholder play declined less than 5 percent compared with daily fee play which declined by 25 percent. In FY2021, most of the gain in play was attributed to daily fee golfers.
‣ Monthly passes are available which allow unlimited golf play on weekdays, and play on weekend subject to a $17 per round surcharge. In recent years, about 2,200 monthly passes were sold annually. While the number of passes averages about 185 per month, the number ranges from the Background/Operating History
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Table III-1: Manteca Golf Course Annual Rounds1/
Annual Rounds
Fiscal Year Daily Fee Passholders Total
2009-2010 41,483 21,000 62,483
2020-2011 38,526 19,946 58,472
2011-2012 38,625 20,485 59,110
2012-2013 36,862 21,483 58,345
2013-2014 36,308 22,457 58,765
2014-2015 32,890 21,631 54,521
2015-2016 31,056 20,754 51,810
2016-2017 26.965 19,018 45,983
2017-2018 32,443 16,496 48,939
2018-2019 30,824 18,823 49,647
2019-2020 33,792 18,090 51,882
2020-2021 49,252 23,909 73,161
1/ Excludes complimentary and employee play.
Background/Operating History
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Table III-2: Annual Daily Fee Rounds by Month
Month Annual Average
FY2017-FY2020
FY2021
July 4,579 7,008
August 4,733 6,251
September 4,216 5,717
October 4,526 6,680
November 3,514 5,879
December 2,984 5,524
January 3,296 5,107
February 3,594 5,495
March 4,219 6,440
April 3,1771/ 6,265
May 5,553 6,684
June 5,509 6,111
Total 49,901 73,161
1/. Golf course closed in April 2020 due to COVID-19.
Background/Operating History
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Table III-3: Manteca Golf Course Monthly Passholders--2021 Resident Non-Resident
Month Adult Senior Adult Senior Junior Total
July 40 154 7 26 1 228
August 29 117 7 25 1 179
September 37 131 7 23 2 200
October 30 127 9 25 3 194
November 24 138 8 23 0 193
December 27 97 9 20 0 153
January 26 107 7 20 0 160
February 24 127 4 23 0 178
March 41 153 8 27 0 229
April 25 114 5 25 0 169
May 26 132 11 25 1 195
June 43 146 8 28 4 229
Average 31 129 8 24 1 193
Background/Operating History
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Table III-4: Manteca Park Passholder Play by Month--FY2021 Month Passholders Passholder
Rounds
Average Rounds
per Passholder
July 228 2,531 11.1
August 179 2,022 11.3
September 200 1,953 9.8
October 194 2,332 12.0
November 193 1,881 9.7
December 153 1,757 11.5
January 160 1,453 9.1
February 178 1,740 9.8
March 229 2,281 10.0
April 169 1,981 11.7
May 195 1,868 9.6
June 229 2,110 9.2
Total/Average 193 23,909 123.8
Background/Operating History
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Table III-5: Manteca Golf Course Historical Greens Fees/Passholder Rates 2017 2019 2021
Resident Non-Res Resident Non-Res Resident Non-Res
Weekday
18-Hole Regular $19 $22 $22 $26 $25 $29
Senior --- --- 20 20 21 21
Twilight 16 16 18 18 19 19
9-Hole 16 16 16 16 17 17
Super-Twilight 9 9 13 13 14 14
Junior 12 12 12 12 12 12
Weekend
18-Hole Regular $22 $29 $25 $33 $29 $34
Twilight 17 17 19 19 20 20
9-Hole 17 17 18 18 19 19
Super-Twilight 11 11 15 15 16 16
Junior 12 12 14 14 14 14
Monthly Pass (weekday only)
Adult $85 $98 $99 $119 $114 $139
Senior 70 88 84 99 99 119
Junior 50 50 50 50 50 50
Background/Operating History
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Table III-6: Manteca Park Historical Regular Adult Greens Fees Weekday Weekend
Year Resident Non-Resident Resident Non-Resident
1995 $13 $16 $17 $22
2000 15 18 18 24
2005 18 21 21 28
2010 18 21 21 28
2015 18 21 21 28
2017 19 22 22 29
2018 19 22 22 29
2019 22 26 25 33
2020 22 26 25 33
2021 25 29 29 34
Background/Operating History
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low 100s to the low 200s throughout the year. The number sold is seasonal, but also heavily impacted by weather conditions.
‣ Daily fee play currently accounts for about two-thirds of total play. ‣ The number of rounds per passholder averages just under 10 per month. ‣ Daily fee play is clearly seasonal, with typical winter months averaging about 3,500 rounds compared with an average of about 5,000 daily fee rounds in peak summer months. ‣ Manteca Park grants discounted greens fees and reduced monthly passholder rates to City residents. ‣ Greens fees for non-residents are relatively affordable and in-line with the current market. The resident greens fees are about 15 percent below market rates.
‣ Greens fees (rates) increased only nominally over the 1995-2018 period, increasing only about 1.5 percent per year, and were well below market in 2018. Over the 2018 to 2021 period, greens fees were increased more aggressively--by about 30 percent, bringing them more in-line with rates at comparable courses in the region.
Golf course and City financial results related to the golf course are summarized in Tables III-7 through III-9.
Highlights are presented below.
‣ Annual gross revenue by department over the 2006 through 2021 period are presented in Table III-7.
Revenues were relatively flat from the start of the period through 2017, even declining in some years during the period. Then, with rate increases initiated in 2018, revenues increased substantially over the 2018-2020 period.
‣ With the onset of COVID-19 in early 2020, revenues from golf course operations increased sharply in FY2021, gaining more than 50 percent on a year-over-year basis. It should be noted that while golf related revenue has significantly benefited from COVID-19, clubhouse food and beverage revenues have been adversely impacted, particularly banquet related business. ‣ The average revenue per round of golf for FY2021 is calculated as follows:
Type of Play Average Per Round
Daily Fee Play $23.96
Passholder Play (weekday) 10.16
Total Play $19.45
‣ The City’s gross revenue (greens fees, monthly passes, and concession rents) also increased sharply over the 2018-2021 period. Revenue over this period increased 85 percent from just less than $900,000 in 2018 to about $1.65 million in 2021.
Background/Operating History
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Table III-7: Manteca Park Golf Course Annual Gross Revenue ($000) Fiscal
Year
Greens
Fees
Monthly
Passes
Cart
Rentals
Driving
Range
Merchandise1/Other Total
2006 $692.0 $130.1 $405.5 $73.7 $12.7 $5.6 $1,460.2
2007 712.3 130.0 421.1 69.2 156.8 5.5 1,494.4
2008 729.6 137.0 415.3 70.2 147.9 4.4 1,504.4
2009 713.4 148.4 423.2 68.0 165.6 5.1 1,523.7
2010 708.3 157.6 412.8 68.3 157.0 5.3 1,509.3
2011 641.4 152.7 377.5 62.6 143.0 4.6 1,381.8
2012 655.0 159.1 369.7 65.6 147.0 4.1 1,400.5
2013 602.1 160.0 360.7 61.8 146.9 4.1 1,335.6
2014 564.9 172.5 351.7 58.8 122.9 3.6 1,274.4
2015 520.9 156.2 336.4 52.6 123.7 3.2 1,193.0
2016 513.3 159.8 319.9 51.2 111.6 2.5 1,158.3
2017 460.7 156.1 289.5 52.0 110.0 3.0 1,071.3
2018 608.6 141.8 355.3 91.2 112.4 19.9 1,329.2
2019 648.2 171.9 377.3 106.6 159.5 43.2 1,506.7
2020 737.2 174.0 389.5 111.3 171.4 39.9 1,623.3
2021 1,180.02/ 242.8 544.4 194.6 256.4 82.8 2,501.0
1Excludes merchandise gift certificates, which are recognized as revenue upon redemption. 2/ Based on 11 months actual plus one month estimate.
Background/Operating History
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Table III-8: City of Manteca Historical Revenue From Golf Operations ($000) Revenue Component FY2018 FY2019 FY2020 FY2021
Greens Fees (100%)/Passholders $750.9 $823.2 $913.6 $1,417.4 Golf Concession Rent
Carts $42.0 $45.3 $46.7 $85.2
Range 9.1 10.7 14.8 35.3
Merchandise 5.2 7.2 8.6 12.8
Lessons/Miscellaneous 3.8 2.5 2.2 4.5
Subtotal $60.1 $65.6 $72.3 $137.8
Restaurant Lease $62.2 $58.1 $64.7 $62.9
Other Miscellaneous Revenue $20.9 $19.9 $25.8 $29.8
Total $894.1 $966.9 $1,076.4 $1,647.9
Background/Operating History
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Table III-9: City of Manteca Historical Golf Net Operating Income ($000) FY2018 FY2019 FY2020 FY2021
Total City Revenue $894.1 $966.9 $1,076.6 $1,647.9
Operating Expenses
Salaries & Benefits $737.3 $771.3 $731.9 $859.6
Golf Concessionaire Service Fee 80.2 82.5 105.2 206.3
Utilities 92.1 78.4 91.1 92.7
Golf Course Services & Supplies 48.9 50.1 74.7 78.0
Clubhouse/Other Supplies 29.3 33.6 26.7 39.1
Repairs & Maintenance 68.3 69.0 63.5 107.6
Insurance/Claims 18.7 23.0 25.2 25.2
Administrative Expenses 29.4 30.0 29.2 28.4
Total Operating Expenses1/ $1,104.2 $1,137.9 $1,147.5 $1,437.0 Net Operating Income2/ ($210.1) ($171.0) ($71.0) $211.0 1/ Excludes capital asset expenditures and depreciation. 2/ Before subsidies and/or other fund transfers.
Background/Operating History
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‣ Before depreciation expense and subsidies to the Golf Course Fund, the golf course lost on a cash basis $100,000 to $200,000 per year over the 2018-2020 period. In FY2021, the golf course generated about $200,000 in positive net cash flow.
‣ The debt associated with the clubhouse was fully amortized in 2011, resulting in the termination of annual debt service of $205,000.
Golf Course Maintenance
The City Public Works Department maintains the golf course and clubhouse. Budgeted staffing consists of full- and part-time employees:
Table III-10: Manteca Park Golf Course Maintenance Staff Position Number FTE*
Supervisor 1 1.0
Mechanic 1 1.0
Staff-Full Time 3 3.0
Staff-Part Time (year round) 2 1.4
Staff-Part Time (seasonal) 2 1.1
Total 9 7.5
* Full Time Equivalent.
‣ Importantly, the maintenance staff has undertaken some of the ongoing capital improvements projects within the approved operating budget. This has effectively reduced the capital improvement budget by a modest amount.
Concession Revenue
The golf concession has also benefited from the positive impact of COVID-19 on golf play, with revenues available for operational and other costs increasing sharply in FY2021.
While golf related revenues have soared with the onset of COVID-19, food and beverage revenue has been adversely impacted. The bar/grill revenue, which is closely linked to golf play, increased sharply in FY2021, while the more profitable banquet business declined by about one-half.
Background/Operating History
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Table III-11: Golf Concessionaire Net Revenue Available for Operational Expenses (thousands of dollars)
FY2019 FY2020 FY2021
Concessionaire Gross Revenue
Service Fee (% of Greens Fees)
Tier 1--10% (up to $800K) $80 $80 $80
Tier 2--20% (over $800K) 4 22 124
Subtotal $84 $102 $204
Carts (100%) 377 390 544
Range (100%) 107 111 195
Merchandise (100%) 160 171 256
Lessons/Miscellaneous (100%) 43 40 83
Total $771 $814 $1,282
Less: Rent to City
Carts
Tier 1--12% (up to $425K) $45 $47 $51
Tier 2--20% (over $425K) --- --- 24
Subtotal $45 $47 $75
Range
Tier 1--10% (up to $75K) $8 $8 $8
Tier 2--20% (over $75K) 6 7 24
Subtotal $14 $15 $32
Merchandise (5%) 8 9 13
Lessons/Miscellaneous (7.5%) 3 3 6
Total $70 $74 $126
Net Revenue Available for Operations $701 $740 $1,156
Background/Operating History
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IV. Capital Improvements
Manteca Park Golf Course, not unlike similar facilities, requires ongoing capital improvements to maintain and extend the life of the golf course, clubhouse, and other support facility improvements. The condition of the golf course historically has benefited from a capital improvements program, although capital improvement expenditures in recent years have been very modest. The golf course opened in 1966 and the clubhouse was constructed in 1989.
The golf course also has benefited from two favorable conditions: (1) the underlying sandy-loam soil conditions allow excellent drainage and turf growing conditions; and (2) the source of golf course irrigation is suitable quality groundwater available at no cost (other than pumping expense). These factors promote favorable growing conditions, mitigate some deficiencies in an aged irrigation system, and the absence of subsurface drainage.
Clearly, some capital improvements have immediate impact on the condition and appeal of the golf course and support facilities, resulting in direct revenue enhancement. Other improvements are necessary to maintain the condition and golf course and infrastructure, without much immediate revenue benefit. In effect, these improvements allow the sustainability of the asset and its ability to generate revenue and promote user satisfaction.
A number of golf course capital improvement needs are linked to maintenance practices and resources.
Some capital improvements may be completed utilizing in-house maintenance staff. Further, there often are trade-offs between implementing capital improvements and additional maintenance resources. For example, installation of a new irrigation system likely will reduce maintenance resources employed to repair an aging system. As such, a brief review of the current maintenance staffing levels is presented below, followed by an evaluation of capital improvement needs.
Golf Course Maintenance Staffing
The current maintenance staff consists of the following positions:
Supervisor 1.0
Maintenance Crew (full time) 3.0
Mechanic (full time) 1.0
Maintenance Crew (annual part time-28 hrs.) 2.0
Maintenance Crew (seasonal) 2.0
While there currently is a total of 9 maintenance employees, the full time equivalent staff is approximately 7.2 employees. Compared with similarly size and positioned golf courses, this staffing is regarded as at, or somewhat below, minimum levels.
Capital Improvements
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The staff has done an excellent job at improving the condition of the golf course in recent years, particularly in light of the current staffing levels. Improving conditions will require some additional staffing. In 2021, the part time mechanic position was converted to a full time position. The addition of one more full time maintenance staff, probably serving as an assistant supervisor, would have a significant impact on golf course maintenance conditions. This addition would raise the maintenance staff level to a more normal standard, and allow staff to continue to perform some capital improvements in-house during the year.
Maintenance Equipment
The golf course maintenance equipment currently is owned, with periodic acquisitions of replacement equipment as required. The golf course supervisor has submitted a 5-year budget for new equipment acquisition which totals $440,000, an average of $88,000 per year. The proposed plan appears reasonable and appropriate.
Going forward, it will be necessary to establish a reserve for maintenance equipment and associated tools.
Based on the inventory and condition of the maintenance equipment, it is recommended that an annual allowance of $75,000 to $85,000, inflation adjusted, be established for ongoing needed equipment replacement.
Future Capital Improvement Requirements
Based on inspection of the golf course and support facilities, and input provided by golf course superintendent and in-place concessionaires, capital improvement requirements over the mid- to long-term have been identified. It is important to recognize that this capital improvement assessment is general in nature and a detailed capital improvement plan should be prepared. While the identification of capital improvement requirements, and associated costs, are general, they illustrate the approximate magnitude of the program and priorities of principal capital improvement components.
A brief description of golf course and support facility capital improvements by major component is presented below.
Greens
The greens complexes, which are “push-up” construction averaging 5,000 square feet, were built when the course opened in 1962. Turf is a blend of Poa Annua and creeping Bent grass. The greens were constructed with the existing native soil as opposed to the typical method of importing a sod root-zone profile over subsurface drainage. Irrigation is provided by a simple “block system” whereby all of the sprinkler heads servicing a green operate at one time, significantly limiting control and distribution. Specifically, the greens are old, challenging to maintain, and not constructed according to contemporary standards.
Despite these challenges, the existing native soil conditions coupled with the current high quality maintenance practices are providing adequate putting green surfaces. There does not appear to be any Capital Improvements
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need to replace the greens complexes in the foreseeable term. Clearly, the absence of irrigation control can be corrected with implementation of a new or modified irrigation system, which would have beneficial impact on the greens conditions and consistency, and somewhat reduce current maintenance resources dedicated to the greens.
Greens Surrounds
The greens surrounds consist of a mix of turf type including Bermuda, Poa Annua, and Rye grasses. The greens surrounds are in fair condition, and like the greens complexes, do not warrant major capital work in the foreseeable term--typically the reconstruction of greens surrounds are addressed in conjunction with with greens reconstruction. Further, irrigation improvements providing greater control of watering patterns would improve the condition of the greens surrounds and should be incorporated with improvements to greens irrigation. Completing cart paths and curbing will markedly improve greens surrounds. This is described in greater detail in the “cart path” section.
Tees
Generally, Manteca Park features three tee placements per hole, with an aggregate total of approximately 70,000 square feet of tee surface area. Turf consists of a mix of Bermuda, Poa Annua, and Rye grass. In general, the tee complexes are considered among the weakest components of the golf course. There is a need to redesign/level the tees on several holes, and construct forward tees.
The plan for the upcoming year, which addresses tees on holes #10, #3, and #18, appears reasonable and appropriate. Going forward, the tees will require constant attention, with periodic replacement of tees on all of the holes. Additionally, the completion of cart paths and curbing would significantly enhance the tee complexes. Recognizing that work on the tees will be staged over a number of years, it is reasonable to budget $75,000 to $100,000, inflation adjusted, every ten years to conduct ongoing major repair and replacement of the tees, an average of $7,500 to $10,000 per year.
Fairways
The approximate 30 acres of fairways at Manteca Park are primarily Bermuda turf, combined with poa annua and rye grass. The condition of the golf course fairways is related to maintenance practices/resources and the golf course irrigation system. Th current maintenance staff has substantially improved the condition of the fairways through enhanced maintenance efforts, but once again the block irrigation system (4-8 sprinkler heads per electric valve) limits the ability to control optimal levels of irrigation in many areas of the course. No fairway capital improvements, other than irrigation related elements, are required.
Roughs
Rough areas make-up the majority of turfed land area on the golf course, with about 75 acres of mixed turf type (Bermuda, poa annua, and rye). As with the rest of the golf course, irrigation system limitations Capital Improvements
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represent the main challenge. Much of the rough irrigation is provided by valves that control fairway irrigation resulting in inappropriate irrigation delivery to the heavy concentration of trees in the rough areas.
Improvement of the condition of the rough areas is directly linked to irrigation system improvements and implementation of a plan to address the excessive tree stock in the rough areas.
Bunkers
The golf course has 32 sand bunkers totaling about 45,000 square feet of surface area. The bunkers were constructed in 1962, and are not lined, drained or designed to contemporary standards. The current maintenance staff has expanded the bunkers by cutting bunker edges back to their original locations and added bunker sand to provide reasonably consistent playing conditions. The condition of the bunkers generally are fair to good, with the primary problem related to irrigation sprinklers spraying water into the bunker area. While a bunker replacement program may be considered in he future, this capital improvement is regarded as a low priority program. Ideally, green-side bunkers are addressed in conjunction when greens complexes are replaced or modified.
Reconstruction of the bunkers will cost approximately $5,000 to $7,500 per bunker, inflation adjusted, yielding a total cost of this element at $200,000 to $250,000. Again, this improvement would likely be deferred as other improvements will have a much higher priority.
Trees
Trees at Manteca Park, recognizing they are an important amenity, represent one of the bigger issues facing the golf course. There is extensive tree cover in the rough areas of the golf course, with a stock of over 2,100 trees of various species, including redwood and eucalyptus. In general, the condition of the tree inventory is fair, and a tree program focused on the maintenance and selected removal of a substantial number of trees is required over the mid- to long-term. Once again, the tree cover and placement play an important role in the performance of the irrigation system, with many areas significantly over-watered while others are noticeably dry. Moreover, removal of stressed and diseased trees, and some healthy trees in poor locations, would improve golf course playability and aesthetics.
Clearly, given the number of trees and substantial cost related to major maintenance and removal of trees, a tree program will be a continuous long term effort. A plan needs to be developed with input from the golf course superintendent and an arborist. Given that some of the work may be performed by maintenance staff, and the City has a lot of the equipment required, even a modest tree maintenance/removal program will likely cost $300,000 to $500,000, inflation adjusted, over the next 10-15 years. A more intensive program may cost substantially more.
Capital Improvements
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Cart Paths
The golf course has a limited cart path network, concentrated in proximity to selected tee and green complexes. In general, the existing paths are in good repair. However, extending curbs and improving drainage should be considered. In several locations around tee and green complexes, irrigation and rain water consistently exists the impervious concrete surfaces resulting in mud and standing water. Given Manteca Park’s favorable soils, rock-filled dry sump pits combined with minor grading would effectively address these problem areas.
The tee and green complexes that currently do not have cart paths and curbing suffer from lack of proper traffic control and significant damage to turf. Construction of these new sections and the above mentioned improvements to the existing cart path network is regarded as a high priority item as an improved system will result in much better condition of the course and a saving in maintenance resources.
While it is important to retain a specialist to design a partial concrete cart path network, it appears that new 8-foot wide cart paths totaling about 3,000 linear feet, with about 1,200 linear feet of curbing may be required. The cost to construct the needed cart path improvements by a qualified outside contractor is estimated at approximately $150,000. Dry sump installation and minor grading could effectively be completed by the maintenance staff.
Course Lakes & Ponds
The golf course has six modest size lakes, two of which are an integral part of the irrigation system and four serving as aesthetic course features. The lakes are relatively shallow and not lined. While these lakes/ponds may at some point require some improvement, this is a very low priority. The loss of water due to the absence of lake liners has minimal consequence as there is no cost of the water (other than pumping) and the water loss effectively recharges the ground water system.
Course Restrooms
The course restrooms are in fair condition and will need some refurbishment at at minimum in the near- to mid-term. The former superintendent estimated the cost of substantially improving the course restrooms at $250,000, which seems very high. Restroom upgrades and scope of work needs to be more clearly identified.
Cart Storage/Maintenance Facility
The cart storage facility is located adjacent to the clubhouse and appears to be functional with an adequate staging area. No major improvements have been identified for this facility.
The maintenance yard, also located in close proximity to the clubhouse, is shared with City Public Works equipment storage. The yard is relatively large and appears to be adequate for golf course maintenance equipment needs. Much of the golf course equipment is stored outdoors which is not ideal. Cleary, some Capital Improvements
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covered storage would provide protection for the equipment which would have long term benefit in terms of extending the life of some of the equipment. The mechanic shop, which is also shared with City Public Works is small but functional. At this time, no major improvements have been identified for this facility.
Driving Range
The existing range has 14-15 tee stations and a small teaching area. The range is not lighted for night use.
There may be opportunities to improve/enhance the practice range through realignment and other improvements such as tee station shade covering. Some of these improvements would likely produce additional revenue. At this point, is is recommended that a driving range architect/specialist be retained to assess improvement needs and opportunities for the range. It is not possible to assign a cost to potential driving range improvements at this time, recognizing that such improvements may be extensive. As a placeholder, an allowance of $150,000 is included.
Irrigation System
The Manteca Park Golf Course irrigation system was constructed when the golf course opened in 1962, and is thus approximately 60 years old. It is a “block” type system with Irritol controllers, and a mix of sprinkler head types (roughly 2,000 heads). There is no central control, with water flow adjustments made at the controllers on the golf course. With the block system, each valve controls 4-8 sprinklers.
The source of irrigation water is ground water. There are two wells on the course, each with a dedicated pump station. Water is pumped into an adjoining lake for storage, and then pumped out of the lakes onto the golf course. There is no cost for the ground water, other than electrical pumping expenses.
This old system, while still somewhat functional, consumes a substantial portion of maintenance staff resources both in the delivery of water and system repairs. The life expectancy of most irrigation systems is considered about 30 years. As noted throughout the capital improvement assessment, the age and features of this system contributes to many other problems on the course such as excessive or deficient irrigation of greens, fairways and roughs, poor bunker conditions. One of the primary factors which mitigate to some degree the inadequacies of the present system is the excellent natural course drainage related to soil conditions.
Attention to the irrigation system clearly represents the highest capital improvement priority. To resolve numerous problems, improve the condition of all golf course features (greens, tees, bunkers, fairways, roughs) will require implementation of a central control system. Moreover, a new central control irrigation system would allow limited maintenance resources to be allocated to other elements of the course, resulting in enhanced condition. Full replacement of the entire system would likely cost $1.5 to $1.8 million. A phased component replacement would cost more, but would allow the cost to be spread over a longer implementation period.
Capital Improvements
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Clubhouse
Given its age and condition, a number of clubhouse capital improvement needs will be required, some nearterm and others mid- to long-term. Identified items include HVAC unit replacement, restroom renovation, kitchen exhaust system, and numerous other structural and tenant improvement elements. It should be noted that some clubhouse improvements have been completed over the past several years, including flooring and window coverings to the upper level, elevator modernization and staircase renovation.
Based on the estimated cost of these improvements, an annual allowance of $30,000 to $40,000 per year appears prudent and necessary over the next 10-20 year period. A small portion of the improvements would be funded by the food and beverage concessionaire.
Parking
Periodic repaving of the existing parking lot will be required. In addition, parking at Manteca Park is clearly limited and adding convenient parking would be beneficial, particularly for the clubhouse restaurant operations. Considered to be a relatively high cost, lower priority improvement, investigation of options for increasing parking should be explored. Resurfacing the parking lot and other parking improvements is indicated at about $200,000.
Miscellaneous
There are a number of other potential improvements which either will be necessary or would provide enhancements to the golf course including items such as perimeter fencing, erosion control, irrigation system pumps, and netting. An annual allowance of $10,000 is included.
Total Capital Improvement Cost and Annual Funding
Excluding golf course maintenance equipment and discretionary enhancements, the cost of the capital improvements program over the 20- to 25-year planning horizon totals approximately $3.88 million, or an average of $150,000-$200,000 per year (see Table IV-1). The irrigation system represents the largest component, accounting for nearly 40 percent of the total.
It is reasonable and appropriate to establish an annual capital improvement program (CIP) reserve fund. It is customary to set aside a percentage of greens fees revenue annually for the CIP reserve fund--ranging at most similar courses from 5 to 10 percent of greens fees.
Capital Improvements
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Table IV-1: Illustrative Manteca Park Golf Course Capital Improvement 20-Year Plan (thousands of constant 2021 dollars)
Component Amount
(thousands of 2021 dollars)
Time Frame
Greens --- ---
Greens Surrounds --- ---
Tees $150 Periodically over planning horizon.
Fairways --- ---
Roughs --- ---
Bunkers 225 Periodically over planning horizon.
Trees 400 Periodically over planning horizon.
Cart Paths 150 Near-term.
Lakes & Ponds --- ---
Course Restrooms 250 Mid-term.
Cart Storage/Maint. Yard 50 Mid- to long-term.
Driving Range 150 Discretionary.
Irrigation System 1,500 Near- to mid-term.
Clubhouse 600 Periodically over planning horizon.
Parking 200 Mid- to long-term.
Other Miscellaneous 200 Periodically over planning horizon.
Total $3,875
Capital Improvements
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V. Market Overview
The following section presents a review and analysis of the national and regional golf market.
National Golf Market Overview
Nationwide, golf play increased steadily between the mid-1980s and 2000. As shown in Table IV-1, during this period, the total number of annual rounds played nationally increased at an average rate of 2.4 percent per year. Golf balls sold, perhaps the best indicator of play, increased at a similar rate (2.5 percent per year).
This unprecedented growth in golf play during this period was due to a number of factors including:
‣ An increase in the number of golfers;
‣ The increasing importance of golf-oriented real estate; ‣ Expansion of the golf tourism industry;
‣ One of the longest economic expansions in the nation’s history.
The increase in golf demand and the popularity of golf-related housing development during the 1990s stimulated extraordinary expansion of the national golf course inventory, primarily between 1995 and 2002, as summarized in Table IV-2. Over the 1990-2010 period, the inventory of golf courses in the United States increased by 34 percent, while the U.S. population registered only a 24 percent gain, and golf demand (play) increased only 12 percent over this same period.
Right after the new century started, the first signs of industry problems surfaced, and persisted through 2019. While total golfers and rounds played were down industrywide, most individual golf courses experienced steeper declines in utilization, along with revenue contraction and falling net operating income, as the market totals were spread over an increased supply of facilities. Further, golf course transaction prices declined precipitously, bankruptcies and foreclosures have become routine, and new golf course construction virtually ceased while the number of courses closing substantially exceeded new openings. The impact of market softness was widespread and affected all segments of the market and all geographic areas. Importantly, the industry problems went well beyond cyclical trends, as there was a fundamental shift in recreational preferences and other underlying factors affecting long-term demand for golf.
The onset of COVID-19 in early 2020 has had a profound impact on the golf industry. With the general population having more free time, and with golf representing one of the few acceptable outdoor recreational activities during the pandemic, golf play has increased significantly in FY2021, with most markets reporting gains of 20 to 30 percent over FY2020 levels. It is not clear if these gains will be sustainable once the pandemic fully subsides, but it is likely there will be some long term gains as more of the population has been exposed to the game.
Market Overview
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Table IV-1: Indicators of U.S. Golf Demand (1985-2020)
Year Rounds
(millions)
# of Golfers1
(millions)
Participation
Rate
Golf Ball Sales2/
(millions of dozens)
1985 365 17.5 10.2 36.0
1990 400 27.8 13.5 42.0
1995 420 25.0 11.6 46.0
2000 518 28.8 11.7 52.2
2005 489 29.3 11.2 43.6
2010 475 26.1 9.6 --4/
2011 463 25.7 9.2 --4/
2012 490 25.3 9.0 --4/
2013 465 24.7 8.9 --4/
2014 457 24.7 8.5 --4/
2015 465 24.1 8.2 --4/
2016 468 23.8 8.0 --4/
2017 456 23.8 7.9 --4/
2018 434 24.2 8.0 --4/
2019 441 24.3 8.0 --4/
2020 502 24.8 8.2 --4/
Average Annual Growth
1985-1990 1.8% 9.7% --- 3.1%
1990-1995 1.0% (2.1)% --- 1.8%
1995-2000 4.3% 2.9% --- 2.6%
2000-2005 (1.2%) 0.3% --- (3.5%)
2005-2010 (0.6%) (2.3%) --- (2.1%)3/
2010-2015 (0.4%) (1.6%) --- --5/
2015-2019 (1.9%) 0.2% --- --5/
2019-2020 13.8% 2.1% --- --5/
1/ Represents golfers over 6 years of age. 2/ Estimated by PFA based on “soft goods” sales recorded by Data Tech and golf ball manufacture sales. 3/ For period 2005-2009. 4/ Data for 2010-2020 not available in comparable format.
Source: National Golf Foundation; Golf Data Tech; and Pro Forma Advisors LLC.
Market Overview
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Table IV-2: Number of Golf Courses1 - U.S.
Year Annual Courses
Added
Annual Courses
Closed
Total Golf
Courses2
Average Annual
Percent Change
1990 --- --- 11,105 ---
2002 315 15 14,725 2.96%
2006 120 60 14,968 0.8%
2007 115 95 14,988 0.13%
2008 70 105 14,953 (0.23%)
2009 50 100 14,903 (0.33%)
2010 45 110 14,838 (0.44%)
2011 35 140 14,733 (0.71%)
2012 14 155 14,592 (0.96%)
2013 14 157 14,449 (0.98%)
2014 11 174 14,289 (1.13%)
2015 17 177 14,129 (1.12%)
2016 15 211 13,933 (1.39%)
2017 15 206 13,743 (1.36%)
2018 12 198 13,557 (1.35%)
2019 10 256 13,311 (1.81%)
2020 12 181 13,142 (1.27%)
1/ 18-hole equivalents.
2/ Includes courses added, less courses closed., 2006-2019 Source: National Golf Foundation; and Pro Forma Advisors Market Overview
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Regional Golf Market
The San Francisco Bay Area and San Joaquin Valley regional markets very closely mirrored national market trends. Golf demand was strong and increasing during the late 1980s and 1990s, with golf courses in these regions performing well. The strong demand coupled with overall interest in golf, stimulated significant expansion of the golf course inventory.
In the nine-county Bay Area, the number of public access regulation length courses was increased from 70 in 1990 to 100 by 2005, an increase of 43 percent. No new golf courses have been added to the inventory since 2005, and about 10 golf courses have been closed over the past 10 years.
The central San Joaquin Valley also experienced significant expansion, with seven regulation length public access courses opening, more than doubling the inventory since 1990. Several golf courses in this region also have closed in recent years.
Local Golf Market
The primary market area served by the Manteca Park Golf Course is generally defined as golfers residing within about a 20- to 30-minute drive time, which broadly corresponds to the area extending from Turlock on the south to Lodi on the north, and from eastern Livermore on the west to the Stanislaus County line on the east. This approximates about a 25-mile radius area from Manteca Park Golf Course, and contains a resident population of about 800,000.
Within about 25 miles of Manteca Park Golf Course, 10.5 regulation length public courses (18-hole equivalents), and 4.0 executive length courses were developed, of which three regulation length 18-hole courses (Lockeford Springs, Mountain House and Van Buskirk) and one 9-hole regulation (Modesto Muni) have closed in recent years:
Table IV-3: Regional Public Access Golf Course Inventory Number of Courses
Developed1
Number of Courses
Closed
Net Golf Course
Inventory
Period Regulation Executive Regulation Executive Regulation Executive Pre-1990 4.5 1.5 --- --- 4.5 1.5
1990-2006 6.0 2.5 --- --- 10.5 4.0
2007-2021 0.0 0.0 3.5 --- 7.0 ---
1/ 18-hole equivalents.
Market Overview
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Expansion of the golf course inventory within this area since 1990 was significant, and include the following public courses:
Table IV-4: Local Area Courses Opened Since 1990
Course/Location Year Opened Distance from
Manteca (miles)
Micke Grove/Lodi 1991 22
Creekside/Modesto 1991 20
Lockeford Springs/Lodi1/ 1995 25
Diablo Creek Ranch/Patterson 1996 25
French Camp/Manteca (exec. 9)2/ 1996 6
Jack Tone/Ripon2/ 1997 8
Lyons/Stockton (9 holes)3 1997 16
Diablo Grande-Legends 1998 25
Reserve at Spanos Park/Stockton 1999 23
Mountain House/Livermore4/ 2006 25
1/ Closed in 2018.
2/ Executive length.
3/ Military course open to the public
4/ Closed in 2008.
1/ Closed in 2018.
2/ Executive length.
3/ Military course open to the public
4/ Closed in 2008.
1/ Closed in 2018.
2/ Executive length.
3/ Military course open to the public
4/ Closed in 2008.
The Mountain House course on the east side of Livermore closed in 2008 due to a variety of legal and market factors, and Lockeford Springs closed in 2018. The 18-hole regulation length Van Buskirk municipal course in Stockton closed in 2019 and the 9-hole regulation length Modesto Muni course closed in 2020.
In addition to the new courses developed within the 25-mile radius local area, there were another 15 public golf courses opened over the past 15-20 years within 25 to 35 miles of Manteca, including courses in Antioch, Brentwood, Livermore, Ione, and the western Sierra foothills.
The extraordinary expansion of courses in the region resulted in a significant dilution of play at individual courses and a dampening of greens fees increases until the emergence of COVID-19. Through 2019, public courses in the region, on average, experienced a 20 to 30 percent decline in annual play since the the onset of the significant financial recession in 2008. Greens fees, after steadily escalating through 2000, also increased only nominally over this period. With COVID-19, play levels recovered most, if not all, of the losses in golf play sustained over the 2003-2019 period, and rates have firmed over the past two years. The sustainability of the COVID-19 impact remains uncertain at this time.
Market Overview
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Characteristics of selected public golf courses located within the local golf market area presented in Table IV-5. A summary of annual play levels at area courses over the 1998-2021 period is presented in Table IV-6.
Greens fees at the local area courses are summarized in Table IV-7 for the period 1998-2021. The percentage change in greens fees, shown below, indicates that fees at Manteca Park have been escalated at a much slower rate than at other area courses.
A review of the market data yields a number of observations:
‣ Annual play at Manteca Park is at the high end of the range for competitive regional courses. There appear to be a number of beneficial factors including excellent course conditioning and golfer services, competitive rates and policies, and low fee monthly play cards. ‣ Following relatively aggressive increases since 2018, Manteca Park non-resident greens fees are in-line with competitive regional courses, although still at an affordable level. Resident rates are discounted about 15 percent, and in-line with competitive municipal courses offering resident discount rates. ‣ Cart utilization at Manteca Park is consistent with competitive courses, despite the flat terrain and short distances from greens to tees.
‣ Most courses in the upper San Joaquin Valley historically have captured a substantial amount of play from more densely populated areas to the west, particularly on weekends. However, with the golf course inventory expansion in areas like Antioch, Brentwood, and Livermore, golfers in areas to the west do not need to travel the longer distances to gain access to public courses.
Market Overview
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Table IV-5: Selected Characteristics of Area Public Golf Courses Course Manteca Park Creekside Dryden Park Swenson Park
Location Manteca Modesto Modesto Stockton
Course Type Municipal Municipal Municipal Municipal
Architect Jack Fleming Stephen Halsey Wm. Bell Fleming
Owner City of Manteca City of Modesto City of Modesto City of Stockton Operator/Concessionaire Debenedeti Golf Kemper Sports Kemper Sports Kemper Sports Year Opened 1965/1979 1991 1959 1950
Number of Holes 18 18 18 27
Par 72 72 72 71
Course Length (back tees) 6,478 6,610 6,531 6,407
Rating (back tees) 71.3 71.2 69.3 69.6
Slope (back tees) 121 117 119 114
Greens Fees
Regular
Weekday $25.00/29.001 $28.00 $25.00 $27.00
Weekend $29.00/34.001 $35.00 $31.00 $32.00
Twilight
Weekday $19.00 $22.00 $21.00 $22.00
Weekend $20.00 $26.00 $24.00 $25.00
Seniors
Weekday $21.00 $24.00 $22.00 $20.00
Weekend --- --- --- ---
Cart Fee/Player (18 holes) $15.00 $12.00 $12.00 $17.00
Mandatory No No No No
Percent Using Carts 60% 60% 50% 50%
Facilities
Clubhouse Size (excl carts) 13,000 6,000 6,000 3,500
Banquet Seating Capacity 235 60 60 ---
Driving Range
Number of Tees 14 22 20 25
Lights No No Yes No
Annual Number of Rounds 73,000 65,000 45,000 65,000
Market Overview
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Table IV-5 (continued): Selected Characteristics of Area Public Golf Courses Course Micke Grove Dry Creek Ranch Jack Tone Las Positas2 Location Lodi Galt Ripon Livermore
Course Type Municipal Daily Fee Daily Fee Municipal
Architect Williams & Gill Fleming George Buzzini R.M. Graves Owner San Joaquin Dry Creek Ranch Buzzini Family City of Livermore Operator/Concessionaire Sierra Golf Mgmt Dry Creek Ranch Buzzini Family CourseCo Year Opened 1990 1963 1996 1966
Number of Holes 18 18 18 18 + 9 executive
Par 72 72 62 72
Course Length (back tees) 6,565 6,752 3,715 6,677
Rating (back tees) 71.6 73.5 58.5 72.1
Slope (back tees) 124 131 88 127
Greens Fees
Regular
Weekday $28.00 $32.00 $18.00/21.001 $42.00
Weekend $39.00 $42.00 $22.00/26.001 51.00
Twilight
Weekday $20.00 $23.00 $19.00 $30.00
Weekend $22.00 $30.00 $21.00 34.00
Seniors
Weekday $18.00 $26.00 $18.00 $32.00
Weekend 28.00 --- $22.00 ---
Cart Fee/Player (18 holes) $18.00 $13.00 $13.00 $17.00
Mandatory No No No No
Percent Using Carts 50% 65% 40% 60%
Facilities
Clubhouse Size (excl carts) 5,000 6,000 3,500 20,000
Banquet Seating Capacity --- 100 --- 250
Driving Range
Number of Tees 20 30 30 30
Lights No No No No
Annual Number of Rounds 65,000 45,000 40,000 75,000
1Resident/non-resident. 2 Regulation length course.
Market Overview
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Table IV-6: Summary of Regional Public Golf Course Greens Fees--2021 Rate Manteca Park
Manteca
Creekside
Modesto
Dryden Park
Modesto
Swenson Park
Stockton
Mickey Grove
Lodi
Weekday
18-Hole Resident $25 --- --- --- ---
18-Hole Non-Res 29 $28 $25 $27 $28
Senior Resident --- --- --- --- ---
Senior Non-Res 21 24 22 20 18
Twilight 19 22 21 22 20
Super Twilight 14 16 15 14 18
Junior 12 19 18 5 13
Weekend
Resident 18-Hole $29 --- --- --- ---
Non-Res 18-Hole 34 35 $31 32 $39
Senior Resident --- --- --- --- ---
Senior Non-Res --- --- --- --- ---
Twilight 20 26 24 25 28
Super Twilight 16 20 18 16 22
Junior 14 22 20 10 18
Pass Surcharge $17 $10 $10 $5 15
Monthly Pass
Resident Regular $114 --- --- --- ---
Non-Res Regular 139 $133 $133 $170 $120
Senior Resident 99 --- --- --- ---
Senior Non-Res 119 133 133 125 120
Junior 50 133 133 --- ---
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Table IV-6 (continued): Summary of Regional Public Golf Course Greens Fees--2021 Rate Jack Tone
Ripon
Las Positas
Livermore
Tracy Golf & CC
Tracy
Spanos Park
Stockton
Elkhorn GC
Stockton
Weekday
18-Hole Resident $18 --- --- --- ---
18-Hole Non-Res 21 $42 $45* $50 $34
Senior Resident --- --- --- --- ---
Senior Non-Res 18 32 --- 41 24
Twilight 19 30 35* 40 24
Super Twilight 17 22 --- 30 18
Junior --- 14 25 20 15
Weekend
Resident 18-Hole $22 --- --- --- ---
Non-Res 18-Hole 26 $51 $65* $63 $41
Senior Resident --- --- --- --- ---
Senior Non-Res 22 --- --- --- ---
Twilight 21 34 50* 42 31
Super Twilight 19 24 --- 30 21
Junior --- 17 --- 35* 18
Pass Surcharge --- --- --- --- ---
Monthly Pass
Resident Regular --- --- --- --- ---
Non-Res Regular $85 --- --- --- $115
Senior Resident --- --- --- --- ---
Senior Non-Res 85 --- --- --- ---
Junior 85 --- --- --- ---
* Includes cart
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Table IV-6 (concluded): Summary of Regional Public Golf Course Greens Fees--2021 Rate Diablo Creek
Concord
Boundary Oak
Walnut Creek
Lone Tree
Antioch
Riverside GC
Fresno
Madera GC
Madera
Weekday
18-Hole Resident $29 $30 --- --- ---
18-Hole Non-Res 35 37 $40 $27 $29
Senior Resident 24 24 --- --- ---
Senior Non-Res 27 30 35 19.50 20
Twilight 22/241/ 24 25 23 25
Super Twilight 18 21 20 16 20
Junior 15/171/ 15 14 15 16
Weekend
Resident 18-Hole $38 $43 --- --- ---
Non-Res 18-Hole 44 50 $50 $35 $35
Senior Resident --- --- --- --- ---
Senior Non-Res --- --- --- --- ---
Twilight 25/281/ 31 33 26 29
Super Twilight 22/241/ 21 24 16 254
Junior 18/201/ 15 20 13 16
Pass Surcharge --- --- --- $3/$92/ ---
Monthly Pass
Resident Regular --- --- --- --- ---
Non-Res Regular --- --- --- $1353/ $1353/
Senior Resident --- --- --- --- ---
Senior Non-Res --- --- --- 463/ ---
Junior --- --- --- 433/ ---
1/. Resident/Non-Resident
2/. Surcharge for regular frequent player and senior frequent player, applied to each round. Weekend play after noon. 3/. Allows play seven day per week.
1/. Resident/Non-Resident
2/. Surcharge for regular frequent player and senior frequent player, applied to each round. Weekend play after noon. 3/. Allows play seven day per week.
1/. Resident/Non-Resident
2/. Surcharge for regular frequent player and senior frequent player, applied to each round. Weekend play after noon. 3/. Allows play seven day per week.
1/. Resident/Non-Resident
2/. Surcharge for regular frequent player and senior frequent player, applied to each round. Weekend play after noon. 3/. Allows play seven day per week.
1/. Resident/Non-Resident
2/. Surcharge for regular frequent player and senior frequent player, applied to each round. Weekend play after noon. 3/. Allows play seven day per week.
1/. Resident/Non-Resident
2/. Surcharge for regular frequent player and senior frequent player, applied to each round. Weekend play after noon. 3/. Allows play seven day per week.
Market Overview
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Table IV-7: Golf Course Historical Play Levels at Selected Regional Municipal Courses Course 1998 2003 2009 2016 2019 2021
Manteca 76,000 71,000 68,000 51,800 51,900 73,000
Creekside 60,000 56,000 50,000 45,000 52,000 65,000
Dryden 53,000 50,000 48,000 32,000 33,000 45,000
Swenson 65,000 55,000 46,000 50,000 50,000 65,000
Boundary Oak 74,000 68,000 60,000 60,000 58,000 75,000
Riverside 73,000 68,000 54,000 55,000 50,000 75,000
Market Overview
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Table IV-8: Summary of Greens Fees at Local Courses--2021 Weekday Weekend
Golf Course Regular Senior Regular
Manteca Park $25/$291/ $21 $29/$341/
Creekside 28 24 35
Dryden Park 25 22 31
Swenson 27 20 32
Micke Grove 28 18 39
Jack Tone 18/211/ 18 22/261/
Las Positas 42 32 51
Tracy Golf & CC 452/ --- 652/
Spanos Park 50 41 63
Elkhorn 34 24 41
Diablo Creek 29/351/ 24/271/ 38/441/
Boundary Oak 30/371/ 24/301/ 43/501/
Lone Tree 40 35 50
Riverside 27 19.50 35
Madera 29 20 35
1/ Resident/Non-resident.
2/. Includes cart.
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COVID-19
COVID-19 has affected nearly all aspects of normal activity for most Americans, and the impact on the golf industry has been notable. The first confirmed case of COVID-19 infection in California was confirmed on January 26, 2020. Slightly more than a month later, on March 4, 2020, a state of emergency declaration was put in place in California, and a statewide stay at home order was issued on March 19,2020. The shutdown resulted in the closure of both public and private golf courses throughout the State. Following the development of appropriate safety protocol, most golf courses reopened at the end of April or first of May 2020. In effect, as an outdoor recreation experience where adequate social distancing is achievable, golf is considered a safe activity, although there are certain practices which must be adhered to.
Since the reopening of public and private golf courses, an increase in golf course utilization has been observed, with a notable increase in rounds played over the past year compared with FY2020 levels.
Estimates of rounds played at public and private golf courses are provided by Golf Datatech, a national golf research firm, based on broad surveying of a sample of golf facilities. In general, rounds at most courses are 20-30 percent higher in the past 12 months compared with play for the same period in FY2020.
According to virtually all recognized golf analysts, the increase in golf play over the past year is attributable to the presence of COVID-19. There are a number of factors which are cited for increased golf participation over the past year. Golf is considered a safe recreational activity because it occurs outdoors and allows social distancing. Indoor recreational activities are not deemed safe in the current environment, and thus there are limited recreational options available to individuals seeking distraction from COVID-19. As well, many individuals are working at home either voluntarily or mandated by employer mandates. Lastly, due to employment cutbacks, school closures and other factors, individuals have more free time available during this stage of the pandemic.
The increase in golf play has been observed at both public access golf courses and private clubs. The level of increase has been somewhat uneven from place to place due to demographics, golf course capacity, economic considerations and the like. At this time, the question remains as to the long term impact of the pandemic on golf participation. Clearly, the absence of precedents makes it effectively impossible to predict long term implications.
Optimists point to the number of new golfers introduced to the sport, rather than just existing golfers playing more because of more free time. Reportedly, in the COVID-19 environment, new junior golfers have been observed, as well as adult golfers taking up the game.
Those less-than-optimistic experts express caution regarding the retention of the new golfers following mitigation of COVID-19. First, as life returns to some sense of normalcy, other recreational activities will return, and the amount of free time available to both employed adults and school age children will become more limited. Equally important, recent history is not particularly encouraging as to the likelihood of retaining a significant number of new golfers. According to the National Golf Foundation, over the past five years, 12 Market Overview
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million new golfers were attracted to the game, but the net effect is that the number of golfers over that period increased by only about 200,000 (less than 1.0 percent). Clearly, a very small percentage of new golfers have been retained, suggesting that the significant increase in play observed over the past year may be fleeting. Given that the golf experience has not changed, and there have not been any long term structural changes to the industry, this would not be unexpected.
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VI. Operating Economics
The following section presents stable year financial projections for Manteca Park Golf Course from the perspective of the City. The most influential factor in projecting revenue performance for the golf course is utilization. As noted, Manteca Park play levels have increased approximately 40 percent over the past year due to the beneficial impact of COVID-19 on golf participation, increasing from 51,000 in FY2020 to just over 73,000 in FY2021. For the first four months of FY2022, play is down approximately 10 percent from the same period one year earlier, but still significantly above play levels pre-COVID-19..
It is not possible to predict the sustainability of the COViD-19 impact at this time, although it is likely that much of the impact will dissipate once more normal times return. At the same time, most analysts believe that there will be some, perhaps substantial, lasting positive impact on golf. As such, projections for Manteca Park are prepared for four annual play scenarios--55,000, 60,000, 65,000, and 70,000 rounds.
Revenue Enhancement
There are a number of potential measures which would likely enhance revenues and/or reduce operating costs at Manteca Park.
Resident Discount Cards
Currently, residents do not need to show documentation that they reside in the City of Manteca and thus are entitled to greens fees discounts. It is appropriate to introduce a formal annual identification card for residents which needs to be presented at the pro shop counter to receive the discounted fee. It is estimated that this may result in an increase in non-resident greens fees of as much as $10,000 per year.
Greens Fees
Greens fees are by far the most important source of revenue for the golf course (and City), representing about 70 percent of total revenue accruing to the City. Greens fees revenue is the product of the greens fees and play levels. As the result of sharp increases in rates in recent years, the current greens fees structure at Manteca Park is considered close to market, yielding an average daily fee greens fees of about $24 per round in FY2021. At this time, it appears that the market will bear a slight one-time increase in greens fees which, in effect, will generate additional funds for ongoing needed capital improvements. A one-time increase of $2 for all 18-hole rounds, and $1 for 9-hole and twilight play is recommended. Junior and military rates would remain unchanged. The alternative to increasing greens fees directly would be to introduce a “capital improvements surcharge”.
Operating Economics
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Monthly Passes
Monthly passes, which allow unlimited play on weekdays, are available to adults and seniors at between $99 and $139 per month, depending on resident status and age. Based on current passholder play levels, the average passholder revenue per round is calculated at $10.16, compared with $23.96 for daily fee play.
While passholders are a loyal and consistent source of revenue, the question of equity compared with daily fee players may need to be addressed.
There are a number of changes to the monthly pass program which should be considered, including the following modifications:
- Increase the monthly pass fees approximately 20 percent ($20 per month) to bring them more inline with monthly pass fees charged at similar courses in the Central Valley; - Convert the monthly pass into an annual pass, even at a slight discount from the cost of 12 consecutive monthly passes;
- Reduce the monthly pass fee by $20 to $25 per month, while adding a $5 per round weekday greens fee surcharge (the course currently allows passholder play on weekends with a $17 surcharge).
Concession Agreements
While the golf concession agreement has been reasonably equitable with regard to revenue sharing and providing incentives to promote play, the surge in golf play and golf revenues related to COVID-19 created substantial windfall gains for the golf concessionaire. Restructuring the golf concession agreement to minimize windfall gains, while still providing fair compensation to the concessionaire with appropriate incentives, should be pursued. A cap on overall golf concessionaire compensation would be one method of achieving this objective.
At the same time, the structure of the food and beverage concessionaire agreement created some hardship during the pandemic, and should also be restructured with concession rent based on a percentage of gross revenue.
Gross Revenue Projection
Annual gross revenue, expressed in constant 2021 dollars, at stabilization is projected for principal revenue components below.
‣ Greens Fees: Over the next year, a one-time greens fee increase of $2 for all daily fee 18-hole rounds and a $1 increase for 9-hole/twilight play (excluding juniors and military) is recommended. This increase effectively is in lieu of a capital improvement surcharge, and would push greens fees for nonresidents to market levels, while still providing a meaningful discount to City residents. Given the mix of play at Manteca, the average greens fees will increase from a current level of $24 to approximately Operating Economics
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$25.40 per daily fee round. This increase will result in an increase in greens fees revenue of about $45,000 to $60,000 per year, depending on daily fee play levels. ‣ Monthly Play Passes: The monthly play pass program appears overly generous. The current average revenue per round is slightly over $10.00 for monthly passholder play. Increasing passholder monthly rates by $20 across the board is recommended, which would increase the average fee per passholder round to about $12.00. This rate increase should result in an increase in passholder revenue in the range of $40,0000-$45,000 per year.
‣ Golf Concession Revenue: Cart, driving range, merchandise, and miscellaneous revenue per round are projected to remain basically unchanged from current levels. - Carts: $7.50 per round.
- Range: $1.50 per round plus $50,000 per year.
- Merchandise: $3.50 per round.
- Other: $.10 per round.
‣ Restaurant Lease Income: While it is recommended that the restaurant rental rate be restructured, the current level is assumed to remain in place at approximately $65,000 per year.
Based on the revenue enhancements indicated, City revenue at the various play levels is presented in Table VI-1, along with actual performance for FY2020 and FY2021.
City Obligations
City obligations related to the golf course consist of operating expenses, capital maintenance equipment replacement, and the funding of the ongoing capital improvements program (CIP). These obligations are summarized in Table VI-2 for the various projection scenarios.
Operating Economics
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Table VI-1: City of Manteca Projected Stable Year Golf Net Operating Income (thousands of constant 2021 dollars)
Actual Projected
FY2020
(51,880
rounds)
FY2021
(73,160
rounds)
55,000
Rounds
60,000
Rounds
65,000
Rounds
70,000
Rounds
City Revenue
Golf Fees
Greens Fees (100%) $737.2 $1,180.0 $930.0 $1,005.0 $1,105.0 $1,190.0 Monthly Passes 174.0 242.8 250.0 262.0 275.0 290.0
Subtotal Golf $911.2 $1,422.8 $1,180.0 $1,267.0 $1,380.0 $1,480.0 Golf Concession Rent
Carts $46.7 $86.0 $54.0 $62.0 $70.0 $78.0
Range 14.8 35.8 22.5 24.5 27.5 30.5
Merchandise 8.6 12.8 9.6 10.5 11.4 12.2
Lessons/Miscellaneous $3.0 $6.0 4.0 5.0 6.0 6.5
Subtotal Golf Rent $73.1 $140.6 $90.1 $102.0 $114.9 $127.2 Restaurant Lease $64.2 $65.5 $65.5 $65.5 $65.5 $65.5
Other Miscellaneous Revenue $28.1 $19.0 $25.0 26.0 27.0 28.0 Total City Revenue $1,076.6 $1,647.9 $1,360.6 $1,460.5 $1,587.4 $1,700.7 Operating Economics
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Table VI-2: City of Manteca Projected Stable Year Operating Obligations (thousands of constant 2021 dollars)
Actual Projected
FY2020
(51,880
rounds)
FY2021
(73,160
rounds)
55,000
Rounds
60,000
Rounds
65,000
Rounds
70,000
Rounds
Operating Expenses
Salaries & Benefits $731.9 $859.6 $885.0 $885.0 $885.0 $885.0 Golf Concessionaire Service Fee 105.8 206.3 132.8 150.0 150.0 150.0 Utilities 91.1 92.7 95.0 95.0 95.0 95.0
Golf Course Services & Supplies 74.7 78.0 75.0 75.0 75.0 75.0 Clubhouse/Other Supplies 26.7 39.1 40.0 40.0 40.0 40.0
Repairs & Maintenance 63.5 107.6 100.0 100.0 100.0 100.0 Insurance/Claims 25.2 25.2 25.0 25.0 25.0 25.0
Administrative Expenses 29.3 28.4 30.0 30.0 30.0 30.0
Maintenance Equipment Repl. --- --- 75.0 75.0 75.0 75.0 CIP Reserve --- --- 150.0 150.0 150.0 150.0
Total Operating Obligations1/ $1,147.5 $1,437.0 $1,632.8 $1,650.0 $1,650.0 $1,650.0 1/ Excludes capital asset expenditures and depreciation. 2/ Before subsidies and/or other fund transfers.
Operating Economics
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City Net Operating Income
Based on projected City revenue and obligations, City stable year annual net operating income, expressed in constant FY2021 dollars, is presented in Table VI-3. As noted, obligations include operating expenses, an annual allowance for maintenance equipment replacement, and an annual replacement reserve for golf course and clubhouse capital improvements.
Table VI-3: Summary of Projected Stable Year Golf Net Operating Income (thousands of constant 2021 dollars)
Actual Projected
FY2020
(51,880
rounds)
FY2021
(73,160
rounds)
55,000
Rounds
60,000
Rounds
65,000
Rounds
70,000
Rounds
City Revenue $1,076.6 $1,647.9 $1,360.6 $1,460.5 $1,587.4 $1,700.7 City Obligations
Operating Expenses $1,147.5 $1,437.0 $1,407.8 $1,425.0 $1,425.0 $1,425.0 Maint. Equipment Repl. --- --- 75.0 75.0 75.0 75.0
CIP Reserve --- --- 150.0 150.0 150.0 150.0
Total $1,147.5 $1,437.0 $1,632.8 $1,650.0 $1,650.0 $1,650.0 City Net Income ($70.9) $210.9 ($272.2) ($189.5) ($62.6) $50.7 Fiscal years 2020 and 2021 City net income does not include an allowance for maintenance equipment replacement and a capital improvement program (CIP) reserve. Had appropriate allowances been included for these obligations, the net deficit in FY2020 would have exceeded $300,000, with FY2021 showing a balanced fiscal condition.
Going forward, assuming implementation of a number of revenue enhancement/cost reduction measures, the deficit/surplus will be a function of stable year play levels after COVID-19 dissipates. At various stabilized play levels, the annual subsidy ranges from about $270,000 at 55,000 rounds to a surplus of $50,000 at 70,000 rounds.
Operating Economics
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