Good evening and welcome to the concurrent regular meeting of the City Council and Public
Facilities Financing Authority at 6 p.m. on January 60, 2024.
Would you please stand and help me say the Pledge of Allegiance?
I pledge allegiance to the United States of America and to the Republic for which it stands,
one nation under God, indivisible, with liberty and justice for all.
Thank you. May I have a roll call vote? A call? Roll call. Councilmember Francois? Here. Councilmember Silva? Here. Councilmember Wilk? Here. Mayor Pro Tem Darling? Here. Mayor Haskew? Here.
Okay, the next item on the agenda is a proclamation and it is essentially a
a proclamation pretty much describing
the actually dastardly disgusting thing
called human trafficking.
And I have in the proclamation really long things to read.
I'm gonna read a few of them,
but this is far more complex than just my staying at.
Human trafficking is a form of interpersonal violence
in which force fraud and coercion is used to control victims
for the purpose of commercial sexual and labor exploitation
that occurs in many industries
and affects individuals of all genders and ages.
I'm pretty sure a lot of us have watched TV
and we've seen stories about human trafficking.
So I'm going to jump down to the part about the county.
Whereas the County's alliance to end abuse
convened the Contra Costa Human Trafficking Coalition
with the aim of strengthening the County's
comprehensive response to human trafficking
initiated by the County Department's
law enforcement agencies
and numerous community-based organizations.
Whereas the Contra Costa Human Trafficking Task Force
jointly, this actually makes me so angry
about bad behavior that I'm having trouble reading it.
I'm gonna read that again.
Whereas the Contra Costa Human Trafficking Task Force
jointly led by Community Violence Solutions
and the District Attorney's Office
strives to proactively identify
and provide services to survivors,
investigate and prosecute all forms of human trafficking,
and build capacity within the task force
and communities it serves to respond to
and prevent human trafficking using a collaborative approach
involving more than 35 multidisciplinary partners.
Whereas in Contra Costa County between 2019 and 2021,
108 cases of sex and labor trafficking were investigated.
207 suspected victims of human track picking were identified and the district attorney
filed 42 human trafficking cases through the collaborative efforts of the partners to the
Contra Costa human track picking task force.
Whereas the county of Contra Costa is working to raise awareness of human trafficking with
the belief that a more informed public will better understand how their behavior contributes
to a patriarchal culture that facilitates and tolerates the systemic abuse of vulnerable
populations and will take action to combat and prevent human trafficking.
Now therefore, I, Luella Hasku, Mayor of the City of Walnut Creek, on behalf of the Walnut
Creek City Council do hereby proclaim the month of January 2024 as Human Trafficking Prevention
Month in the City of Walnut Creek and urge all residents to actively participate in efforts to
both raise awareness and prevent all forms of human trafficking. During this month let us recognize
as the survivors of trafficking,
let us commit ourselves to building a future
in which no person is denied their inherent human rights
of freedom and dignity.
Let us make it known that human trafficking
has no place in this city, this county,
this nation, and the world.
And I understand that Alana Matthews is here
and assistant district attorney to receive this.
So I'm gonna meet you there.
Okay.
Thank you for being here.
Would you like to send three words?
Sure, thanks.
I'd just like to say thank you on behalf
of DA Dynabectin, my boss.
She is very thankful, and of course, as you can imagine,
she has lots of places to be, not only around the county,
but around the country.
So I am accepting this proclamation
and standing in solidarity,
but I also wanted to mention that human trafficking
is both a crime and an instance of interpersonal violence
in which perpetrators use force, fraud, coercion,
or other means to compel a person to provide labor
or services or engage in commercial sex acts.
A lot of times when we think of human trafficking,
it's a term, but we don't understand what it is,
and that it not only applies to commercial sex acts,
but labor trafficking as well.
The last thing I wanna say is that this is also a month
and an occasion to highlight the survivors
of human trafficking who with their strength, resilience
and expertise are vital leaders
in anti-trafficking human trafficking efforts.
So thank you for the recognition and the solidarity
and helping us work to fight that, thank you.
And please take our thanks back to the district attorney
and thank you for coming here tonight
and sharing your messages with us.
I appreciate it and it goes with my outfit.
Okay, the next item on the agenda is item two, the consent calendar and I am letting
you know that we have withdrawn item two Q from the agenda and we will bring it back
at a future date.
Do I have, is there any public comment
on any of the other items on the calendar?
I see none and therefore I will bring it back to council.
Do I have anybody at council that wants to pull an item or?
I'd like to pull item H please.
Item H, all right.
And I will make a motion to adopt the consent calendar,
items A through Q and S with the amendments
that were at the dais for items A, D, E, and F.
Okay, thank you.
But not Q.
Not Q.
That was pulled.
I said A through, okay.
Yeah, I meant whatever it was.
I thought I had the right one.
Whatever we meant to have, yes.
Do I have a second?
Second.
Thank you.
May I have a roll call vote, please?
Council Member Silva.
Councilmember Francois, Councilmember Wilk, Mayor Pro Tem Darling, Mayor Haskier.
Aye. Thank you that was very efficient. All right the next item on the agenda is
item H. Absolutely correct. I pulled this because I think this is an important
action that we're taking to set aside and allocate some of our unassigned fund
balance into the fiscal emergency reserve and also to, for general fund contingency,
but I had a couple questions about those.
In terms of a general fund contingency reserve, are we proposing to establish any policies
around that in terms of, should it be formula for the future and how we would use those
funds or just to leave them, I guess, essentially, the way we have done it with our facilities
reserve, which we add to it as is and withdraw from it as needed.
Good evening.
Mayor Haskew and council members, Kirsten Lacass, Administrative Services Director.
So what we are proposing would be to have a general fund contingency, which would have
more flexibility versus a catastrophic emergency or a fiscal emergency.
What we will be doing is bringing forward a revised reserve policy, which will also
include this reserve.
And what we are going to propose likely is that we would put a cap on the, or an amount
on what it should be funded, so a two to five percent of general fund expenditures, and
then how it is spent would be brought forward to council as items came forward.
In general, it would be for things that were unanticipated that would come up throughout
the year.
Thank you.
Second question has to do with if we currently we have our fiscal emergent many of our emerged
of reserve accounts are funded at a formulaic level against the operating budget or even
the capital budget I think here are we proposing if we add and increase the amounts in our
fiscal emergency reserve we will be exceeding the formulaic amount will this then be basically
window down over time, or are we proposing to increase the amount of the formula?
It could actually be done either way.
We were proposing to have it be on top of what that formula would be.
However, if we were going forward, needed to have or needed to, preferred not to add
to that reserve and to win away at it, we could and would likely, this would bring us
through 2029 if we were to essentially not fund our reserves but continue to calculate
based on the policy, and then just use this money to help offset that. It would get us
through 2029. So we can discuss that when you bring back the policy updates and how
long before that will happen. Within the next three months we're anticipating. All right.
Thank you. Thank you, Mayor. You're welcome. Anybody have any additional questions and
items? Does anybody want to make a motion? Move to adopt the resolution that authorizes the
the allocation of the fiscal year 2023 general fund unassigned fund balance.
Second.
Thank you.
May I have a roll call vote?
Councilmember Silva.
Aye.
Councilmember Francois.
Aye.
Councilmember Wilk.
Aye.
Mayor Pro Tem Dario.
Aye.
Mayor Haskew.
Aye.
Motion carries unanimously.
Next item on our agenda is public communications.
This portion of the meeting is reserved for comment on items not on the agenda.
Under the Brown Act, the council cannot act on items raised during public communications
but may respond briefly to statements made or questions posed.
Request clarification or refer the item to staff.
Consistent with section 9.5 of the City Council Handbook, 30 minutes will be allocated at
this time for public communications for items not on the agenda.
If additional time is required public comment for public communications for items not on
the agenda will be provided at the end of the meeting if necessary.
If you would like to make a public comment would you please come forward and step to
the dais.
Greetings my name is Pete Bennett.
I've been a resident in the area for 45 years.
I've had my family murdered.
I've shared this before.
My girlfriend was the one in the Amber Alert
with her beautiful little daughter.
The girl that saved my life last year, she died.
I have enough people around me deceased
that I have a book.
I have a book of tragedies, arson, murders,
extortion, racketeering, police officers arrested
connected to my story.
I've been standing in front of this council for 10 years.
More than 50 times I've spoken.
I finally got a place to live in the homeless shelter,
a little tiny room.
I don't have any money.
All my money's been stolen.
I lost $2 million in a court case 30 years ago.
I know who did it.
I don't know who did the killing, but I know who blocked it.
I have lost everything I own, including my sons.
All my property's been taken over and over.
I got robbed in my storage unit.
$2,000 worth of my music gear was stolen again.
Do you think maybe somebody could give me an answer?
walnutcreekpolice.com,
I'm gonna start putting all the death threats I get.
I get hundreds of them.
I think my life was worth more than nothing.
Thank you.
Are there any other people who would like
to make a public comment?
Seeing none, we will move on to council member
and staff announcements,
reports of activities and requests.
City attorney.
Madam Mayor, there was no reportable action
from closed session this evening on either item.
Okay, city manager.
Yeah, good evening, Dan Buckshi, city manager.
I do have two updates this evening.
The first is related to the East Bay Economic Development
Association known as East Bay EDA Walnut Creek is a member.
It's comprised of hundreds of organizations
in both Alameda and Contra Costa counties.
I serve on the executive board as an appointee
from the Public Managers Association for Contra Costa.
It's about a 30 member board.
The reason I'm branched to your attention last week,
there was a panel that was hosted at the meeting
on retail theft, primarily on organized retail theft.
The Alameda district attorney Pamela Price was present,
a probation chief of Alameda was present.
Our Contra Costa district attorney, Dinah Becton was present.
A few Oakland PD officer police management were there
and our chief Jamie Knox served on this panel.
And the reason I bring this to your attention,
obviously it was a good update and discussion
on the different dynamics,
but to highlight how significant organized retail theft
has become, not only throughout the Bay Area,
but California.
It is not unique to Walnut Creek.
It is pervasive throughout.
What I find interesting from a public policy perspective,
the East Bay EDA Board is contemplating making public safety
and retail theft its number one priority
as it's the number one impact on the economic prosperity
of the region from its perspective.
They haven't decided that yet,
but that's the discussion at this point in time.
that served on this board now for about four or five years,
and this is by far the most substantive issue
in terms of safety.
There's nothing along these lines
that's come up previously.
So I wanted to acknowledge our chief
and thank him for serving on that board.
He did a great job.
The update was well received.
And just also the highlight that in many avenues,
retail theft is coming up.
Walnut Creek is trying to press the issue
as much as possible per your council's direction
per our legislative platform.
So it's an update on that front.
The other one to touch base briefly
on the governor's state budget proposal
that came about on January 10th.
The state budget has proposed at 291 billion,
of which 209 billion is the general fund,
as you've probably read in the news.
There's some lack of agreement
between the independent legislative analyst office
on the sides of the budget gap
compared to the governor's staff.
The legislative analyst department has estimated
the budget gap or deficit at 68 billion,
the governor's office is estimating at 38 billion.
So a $30 billion difference.
Now part of this is basically budgeting parlance
in terms of what's in the baseline or what's not.
After some adjustments,
they're really about $10 billion apart
in their difference of opinion.
The governor's budget addresses about 58 billion
of the 68 billion identified
by the legislative analyst's office.
The quote that I hope is never used
for our budgeting for the LAO
is that that differential of about 10 billion
is plausible but optimistic.
So the governor's budget is much more optimistic
in terms of revenue assumptions
and what will rebound compared
to the legislative analyst's office.
It's about 10 billion of the differential.
I guess if you're looking for the good news,
direct funding to cities does not appear to be at stake
or on the table at this point in time.
A lot of the strategy is about deferring some expenditures
into future years with the idea that personal income tax,
which accounts for about 70% of the revenues
of the state budget will rebound
because it is very cyclical.
There is about eight billion of cuts
that are legitimate cuts.
A lot of the other activities are more deferrals
and some other types of shorter term adjustments.
So I just wanted to provide that update.
way the process works is this will continue to be discussed in the legislature, the governor
that will then come out with the May revise proposed budget and then the legislature has
until June 30th I believe it is to adopt the budget to take effect for the new fiscal year
and that's my update mayor. Thank you. Thank you. Quite quite comprehensive. Matt would
you please be our first? Thank you mayor. My update is brief. I had a nice holiday break
and I'm raring to go in terms of taking up my council activities in January. I have a
chamber board meeting on Thursday and a Recycle Smart board meeting next week, so I will give
an update at our next council meeting. Thank you. Council Member Wilk. I'm not plugged in today.
Just again, a brief update, maybe not quite as brief, but still a brief update. So on county
connection we approved the reappointment of Ian McLaughlin who was a Walnut Creek
resident to the Advisory Committee representing the city of Walnut Creek so
that was approved at our last meeting. We did receive an update from our
general manager regarding a proposed bill by Senator Wahab that is to bring
all operators under one main entity for the nine counties. You're probably
familiar with this, with CCTA. It's under discussion. It's actually been put off
now for another year, but it's quite controversial. None of the bodies that
are part of these, like County Connection and Tri-Delt and all these
other public transit agencies, none of them are for this. So the conversation is
involved with MTC and what can be done to alleviate the concern that there are
inefficiencies, the fact that there are several different transit agencies that all roll up to
BART, essentially. We had a finance committee meeting. That's actually what we're going to
be talking about in our agenda item coming up. And I had the opportunity to attend the
Bedford Gallery for the California Clay exhibit. Huge amount of people came. It was great.
Pottery and clay is big, big stuff in California, especially in the Bay Area.
So get out there and check out the bed for gallery.
Council member Silva.
Thank you very much.
Happy new year everyone.
Along with council member Francois,
I serve on the board of Recycle Smart,
which is our solid waste authority and recycling authority
for Walnut Creek and some other agencies near us.
We are working on an upcoming new franchise agreement
with our various vendors and we have entered
into negotiation period and this means,
and this is important for my colleagues to know,
this means that anyone representing all of us
cannot speak with anyone who represents a potential vendor
about the franchise issues.
So it extends beyond our board members and staff
to include our staff here at this agency.
So just be mindful of that because it puts us
and we don't want to step over the lines
of the rules that we've established for this.
So thank you, all.
And I also serve on the
California Seismic Safety Commission,
and last week during our quarterly meeting,
we discussed the fact that the
California Earthquake Authority is offering
one-time grants to homeowners across the state,
not all parts of the state, but in certain zip codes,
and all of Walnut Creek's zip codes are eligible.
it's up to $3,000 one-time grant to a homeowner
to basically improve their seismic resiliency
through brace and bolt programs
to basically make your foundation more resilient
to earthquakes and less likely
to have seismic consequences if we have an earthquake.
It is to be qualified,
you need to be in the right zip code,
which anyone living in Walnut Creek,
unincorporated or incorporated is.
It needs to be a single family home, so it can't be a condominium in our apartment.
And you need, it needs, the construction needs to be older than 1980.
So if you have a newer property, you are, the foundation structure is probably meets
seismic codes.
So I wanted to pass it on.
And in order to, the program, you have to submit by mid-February your application or
your interest and you go to EarthquakeBraceBolt.com to get the details
that's EarthquakeBraceBolt.com and thank you everyone I hope some people
take us maybe I'll do it thank you thank you mayor thank you welcome mayor
pro tem darling thank you and happy new year again I got to represent the city
at the mayor's conference because our mayor was enjoying her family and we
heard about the 30 by 30 program East Bay Regional Parks came and presented
and it's a program that we will be taking a look at to see it's the
governor's commitment to increasing the amount of land and conservation within
the state of California and so there's some opportunities there. Councilmember
Wilk and I were the finance committee we'll talk about that and we did the
legislative committee today heard about all the happenings in Sacramento and all
all the fun stuff going on there.
Walnut Creek downtown, their board got together.
They talked about wrapping up the ice skating season.
They were very appreciative of the money
that the city put into the ice skating rink this year.
And then we also, they got the same great presentation
on the contribution of the arts
to the financial picture in Walnut Creek that we got.
And they were very appreciative of that
and they really enjoyed getting all that information.
The last thing, MCE hasn't met
because we didn't have our meeting this month,
but we have been working for a while
on a tool that should lower the cost of renewable resources
and it's taking advantage of the MCE's ability
to issue tax exempt bonds.
We formed a separate California Community Choice
Aggregate Financing Authority,
and they are issuing bonds which allow us to prepay
for energy contracts.
It is something that has been happening
for fossil fuels forever.
It's one of the first times that they've done it
for recyclable, renewable.
And it's gonna save approximately 12%
on the prepaid energy for the first seven years.
It's anticipated, it worked out much better
than we anticipated.
We got a lot more interest,
so we got a much better interest rate.
And it should save probably enough power
to fund 210,000 homes, or to charge 210,000 homes,
it's gonna help us really help maintain the costs
that MCE is charging for electricity.
So it was an innovative financial package
that people put together.
Took me hours to write the formulas out
to figure out how it worked,
but once I figured it out, I was like,
wow, that's really cool.
So that was good to see that work.
Thank you.
I had a Contra Costa Transportation Authority meeting
and we spent a lot of time talking about the issues
with the Richmond-San Rafael Bridge
and how much additional structure needs to be added
if we take out the bike lane
and put in an additional lane there.
I tried to look interested.
It wasn't very interesting to me,
although I did learn a lot about how you build bridges
and how you keep it going.
but I like it better when we talk about us.
Speaking of ice skating,
usually we don't mention the fun part,
but I actually went ice skating four times,
15 minutes a shot, did not fall once,
and I can attest that those little kids
with those stupid, excuse me,
with those plastic guiding things
are a complete danger to anybody over 30.
So we encourage you to come.
We had a lot of fun and it was great to see the kids.
And so thank you to Walnut Creek downtown
for putting it on and we're happy to do that.
Okay, now I think that we've covered that item
and the next item is consideration
for the Boundary Oak Driving Range
Improvement Project Fund, and I see
Kevin Safin has stepped forward.
I have, thank you, Mayor,
members of the Council for the record.
Kevin Safin, Director of Arts and Recreation.
I am talking tonight about the Boundary Oak Driving Range
funding options, and I do wanna thank the Finance Committee
for their work on this.
Council Member Wilk, Mayor Pro Tem Darling,
and Treasurer Cassano for their work on this.
You have in your packets the agenda report.
won't go through all the details, it'll just feel like it.
Thank you for laughing.
So tonight the recommended council action, which is recommended by staff and by the Finance
Committee, is to adopt a resolution approving funding for the Driving Range Improvement
Project with an internal loan from the General Fund in the amount of $4.721 million, with
a term of 15 years and a fixed rate of 2.75 percent.
That's one in two, increasing appropriations in your capital budget by $721,000 for the
total of 4.7 to 1 million. So I'll come back to that recommendation at the end
of the presentation. So background on the golf course and the property. This is a
city asset, city owned asset. I'm going to talk about an enterprise fund but this
is owned by the community. Opened 55 years ago in 1969, a beautiful 18 hole
championship course, many practice areas, putting, chipping, a large 30,000 square
Clubhouse containing Pro Shop, Cart Barn, Grill downstairs, the Taphouse, and then
upstairs event spaces. And then there's the driving range. So the pictures that
I'm going to show you here are beautiful and stunning and reflect the work of
Coorsco. Coorsco is our partner in this. I'll talk about them in a second. They
also maintain the driving range, so I don't want the pictures that I'm showing
with the driving range to reflect the work that Coorsco does, but here we go.
This is what the driving range looks like from above the top of the range, looking down
toward Ignatio Valley.
So, I'm going to talk a bit in a minute about the amenities or lack thereof of the range,
but you'll see pictures that I don't usually show when I'm promoting our programs, but
this is to paint an image of what we're facing at the course.
So, a background about, again, that's an image of the driving range, a background about the
golf course.
It is an enterprise fund, which means that we are self-sustaining, and funds generated
by the course stay with the course, whether it's for operations, for capital, or for reserves.
There is no regular general fund support for the golf course, and there is no Measure O
Fund support going to the golf course.
We are healthy.
There's a history of investing in the course to support the investments, improving the
course conditions, the cart pass, the irrigation system, the clubhouse, the half house.
An all-debt service has been paid consistently.
because of decisions that were made by this council,
prior councils, and prior staff, including my predecessor,
who's here in the audience as well.
So I want to thank him, Barry Gordon,
for his work and his vision for this project.
So more about the operation.
Coorsco, Incorporated, operates Boundary Oak.
It's called a management contractor agreement
that we have in place since 2009.
We were new to five years later in 2014.
And then again, we're good with Coorsco,
who is a fabulous partner to us through 2032.
And there are three standards, three pillars, that we're looked at to define our success.
The first is customer experience, which is expected to be excellent, and it is.
It's a well-maintained property, and the enterprise fund itself is strong.
That's true of the entire course, with the exception of the range.
And so, the headline is that the range is not meeting those three success pillars, customer
service, well-maintained, despite our best efforts, and return on the investment there.
So that's our opportunity here.
So a bit about the driving range and the why we're here, without going into all the details,
the irrigation system is no longer functional.
The landscaping, as you saw from the first image, is eroding.
There are negative environmental impacts.
As a result of that, requires course code to continue to invest and fix the things that
aren't right there.
One of the worst examples, or perhaps best examples, of the condition is to show those
images there on the right.
it rains, we have to close the course. Why? Because as you see, the balls get plugged
in the mud and our machinery that would normally be able to pick up balls or the pick up balls
in other courses don't work. And so we have to close the course to pick up those balls
by hand by the staff. And so I believe we are closed part of this weekend because it
was raining. We're probably closed tomorrow because it's raining. So as a result, it's
inefficient. Our amenities also lag behind other comparable
unique courses. And it's inconsistent what we expect of
Boundary Oak and frankly, Walnut Creek. And so that's kind of the
background as to why we're doing this. It's 55 years old, much
like the pool at Heather Farm, we continue to maintain it and
keep it in a fairly workable condition. But it's in need of
significant investment. What's the potential? Better quality
experience for the customers, more modern amenities, reduced
impact on the environment and a stronger financial return,
which I'll talk about here.
Right now, golf is a good business to be in,
and it has been since the pandemic.
It was one of the few things that the public could do
2020, 2021.
And so our numbers, this is just the driving range alone.
Our numbers were very strong, even compared to budget.
And so we're at about 350 to $400,000 budget,
more than that in the actual, so over $400,000.
That said, we believe we can do better,
with better amenities, better service, better experience.
Closer to 650,000 a year is what we're estimating.
So that's beginning in 25, the 24th period of course,
we potentially with this project be under construction.
So what have we done to help identify opportunities
to improve?
In 2021, the council approved funding
from the enterprise fund for a design consultant
to help us deliver construction documents and design
and cost estimates for what a new driving range could look like.
We retained in 2022, a firm called the Nichols Group,
who did that work for us.
And their design work includes improvements to the range,
improvements to the T's, better ADA access,
drainage improvements, better landscaping,
small plaza for people to gather, upgrades to utility,
and a top tracer system, which I'll talk about in a second.
So this is all done by the Nichols Group.
I also want to thank our public works engineering friends,
Alex Wong, who led this effort from the public works side.
So thank you, Alex and Heather, for your support.
So top tracer technology, what is that?
You may be familiar with top golf.
This isn't top golf, but it's a whole lot better
than we have today.
So these are images of what you might
see in a new facility at Boundary Oak.
So a top tracer system is something
that exists in many other driving ranges.
See those monitors there on the side.
They are installed at the hitting stations,
which allow a golfer to track the distance,
track the height, track your ball speed,
which are very important to experienced golfers.
But for those who are less experienced,
there are also interactive activities.
You can do long drives, you can do close to the pin,
you can do points games with your friends and your family.
And then another fun thing is you can play virtual golf
on Pebble Beach or St. Andrews through this system.
So it's pretty cool.
So we're looking forward to that opportunity
part of this project, which will then lead to more people hopefully coming to the course
and spending one more time there.
What's the cost?
Those improvements don't come necessarily cheap, but we think this is a good investment
to make in this project.
The construction, of course, is the largest number, about 3.7 million.
The rest are soft costs here.
So the total, if this were funded through an internal loan, is about 4.7 million.
this refunded externally, and I'll talk about this, it would be another $184,000 roughly
with financing charges.
So that's the number that we're looking to figure out how we're going to pay for.
What are the parameters that we're looking at?
So potentially we're looking at, and this is up to the Council, but we're looking at
between a 15- and a 20-year payback period, a loan period, for this.
And we believe, between staff and CORSCO, and we're happy to talk about this in greater
detail that the Enterprise Fund has sufficient capacity as a whole to cover the debt service
for each of those different payback periods, 15 years or 20 years, while continuing to
generate revenue offset or other expenses.
So that's what we're looking at here as far as the parameters.
There are two options that are in your staff report.
One is through an external funding vehicle and the other is internal.
So number one is external, and the second, which is recommended, is an internal loan
from the General Fund to the Enterprise Fund.
I'll start with the external.
So again, without going into too much detail,
this is essentially a bond that we would be funding
through an external public financing process.
The city has, through the enterprise fund,
retained a investment in financial management firm,
Wolf Hanson, who we have worked with before back in 2015
when we remodeled the clubhouse at a 15-year term
for 2.32%, and we're still paying consistently
those loan payments.
Other steps would include a bond and disclosure counsel,
all the legal documents, all the official statements,
what would be the collateral, a rate and call on financing.
So that would all involve additional work of the counsel.
Our estimates from our management firm
are anywhere between a 3.3 and a 3.8% interest rate,
depending on the term.
There's more detail to be provided on that if you'd like,
but those are the highlights
of what an external bond would look like.
Internally, a loan from the general fund to the enterprise fund is recommended both by
staff and by the finance committee, as I said earlier.
Just a bit of history, the general funds loaned the enterprise funds about $450,000 back in
2015 to refinance an existing bond from 1997.
That has been fully repaid over the course of 10 years, 2 percent, that was the last
payment was made just in December.
And so what's being recommended here is that $4.721 million loan here that's been recommended.
This does require action from the council to set the rate and the term.
The recommended rates by staff, by your finance committee, and by the treasurer independently
is a 2.75 percent, which balances the current market rates with our historical investment
return.
And again, the other recommendation on the term is for 15 years.
I'm not going to read through all these, the pros and the cons on the next page are what
are shown here.
This is in your report.
Essentially, the pros of an internal loan are that you can have a lower than market
interest rate, which is what's being recommended here.
It moves a lot quicker than an external process would work, would not require collateral to
be put up.
It's most flexible in terms of the term, the rate, the prepayment, and potentially restructuring.
On the flip side, the pros of an external loan would be, it is a cost-effective option,
would not impact the general fund.
The general fund would retain the maximum liquidity, and it potentially would increase
the credit market visibility as the city is looking to potentially do other loan or bonds
in the market.
And then the inverse of these are the cons, right?
So there's opportunity cost for the general fund if this were an internal loan.
It may impact, certainly would impact the liquidity as we put some of the money that's
been identified at year-ends into this project.
But on the other side, there are cons for the bond financing administratively.
It would be somewhat of a burden on staff, it would take a fair amount of time, and it
would cost more.
That's 184,000 that I mentioned earlier.
And so what happens next, we're going to the pros commission in February, talk about the
design.
January, February, maybe into March to the environmental process that will come back
to the council probably sometime in March.
The financing process would start February-March, go out to bid the spring or the contract in
the spring.
Construction would start in the spring and summer and then hopefully by fall, November
perhaps, we'd reopen.
So a period of four to six months, we'd be closed to do the construction.
So that's the next steps in the process.
Again, the recommend action is the resolution for those two items.
I'll come back to this in seconds and I'm happy
to answer any questions that you might have.
Thank you, Kevin.
And as somebody who uses the driving range,
I am very appreciative of this.
My question is, six months without people being able
to take a stroke before getting onto a golf course,
is there any way that another area,
even a driving range net, something can be put up
to help golfers in the meantime?
Obviously it would be not a full driving range,
and something to help golfers.
Good question, I hadn't thought about that.
I might ask my Coorsco and Boundary Oak friends
to come up here and answer that
and see if they've done anything similar at other courses.
Tom Bugbee, it's the chief operating officer of Coorsco.
Tom will perhaps be able to answer that question.
And if the answer is, we've never done that before,
maybe that's your answer.
Okay.
Tom Bugbee, I'm the COO for Coorsco.
We have done similar things during projects.
So there are several options that we can look at there.
And you're right, it's not a great practice area,
but hit a couple balls, get a little loose.
So we can definitely examine those
and they're pretty cost effective too.
That's great, yeah, because the last thing I want to do
is seven in the morning, get out there.
My very first swing of the day is on the first tee.
So that'd be great, thank you.
Understood.
Council Member Silva.
Thank you very much for the report and the work on this.
This has been a long time coming.
This is just the last of a series of improvements
over the last 15 years, I think.
And thank you for your work on this.
When I look at the, first of all, I support this.
So my questions are really,
they're not gonna sound supportive
because I'm gonna ask about the financing alternatives
that were considered.
But one of the things I noticed
when you look at the driving ranged revenues
that are projected,
that the revenues really don't cover the annual cost
of this debt service.
So is there any did by chance,
and I asked you this in writing,
so can you roughly tell us what the revenues
and expenses are for the golf course operations,
not the food and beverage?
I'll talk about it generally,
and I'll have Tom speak to this
in a little bit more specific.
So we have run Pro Forma's, which is a projection
of what the likely outcome would be,
both in terms of expenses and revenue
for the entire enterprise fund, which is golf course,
which is driving range, but also the clubhouse.
So the enterprise fund right now has about $6 million
in the total capacity.
And so the numbers that we've run have shown
that that enterprise fund as a whole can absorb
that additional debt that we think here
on both of those options,
while continuing to fund the operations,
fund the reserve and have a little bit set aside to handle with emergencies.
So I'll let Tom talk a little bit more specifics if you'd like some numbers with that, or if
you want me to just leave it at that, I can do that, too.
You can leave it at that, but it would have been-hopefully we can take a look at that,
because we did the budget in June, and it's in the budget documents that we got over the
holidays, I think.
Right.
So happy to talk about the numbers, if you'd like.
That'd be great.
So I'm going to talk about performing numbers, like post opening, right, of the new driving
range.
And roughly, we're talking about $6.2 million in revenues, what we expect total for the
facility.
Of that, approximately $2 million would be food and beverage, and $4.2 million would
be total golf operations, which would include the driving range, green fees, merchandise,
basically everything on food and beverage.
operating expenses would come in right around 4.3 million of that 1.2 million
is food and beverage so the remaining 2 3.2 is golf operations and so total
before all debt services it would produce a little over 1.1 million
dollars in what we call operating income there is some city overhead that's not
included in that these are kind of just the operational side of the numbers but
There's plenty of cash flow to support the debt service.
And are the monies we set aside for capital improvements and the reserves included in
the operating expense above the line or below the line?
Those come below the line.
Okay.
Thank you.
Thank you.
This is helpful.
So a couple of questions about what was considered.
Sure.
Well, first of all, what is the outstanding balance on the loan that we took out in 2015
improve the clubhouse and what's the debt service on that?
I'm going to give you a round number, it's about $1.5 million remaining, and the term
is still about four and a half years until it gets cleared completely, and that's at
that 2.32 percent.
So the annual payment on that is?
Give me a second.
We're paying about $330,000 annually.
We pay it twice a year.
So this will more than double our debt service?
Likely.
Yes.
Did we consider consolidating it?
And you gave me an answer, so since it was such a lovely answer, I think you should give
it to all of us.
Well, I didn't.
It wasn't just me.
It was my finance friends as well.
It was considered.
We talked to our finance consultant, and what they had indicated was you could do it.
It would extend that $1.5 million over a longer period now, rather than paying it off sooner,
at a higher rate.
It's also held by a private institution, and they would have to agree to fold it into whatever
we do differently.
Another question is you can reduce the amount of interest you pay if you do a lending term
that is faster.
Did we look at maybe 12 years?
We did.
We looked at 12 years.
Well, we looked at 10 years.
Yes, you would reduce the interest payment.
would increase your principal. And as we currently have that existing debt that runs through
2028, it was felt by staff and our advisor that loading more debt into that shorter amount
of time isn't advisable from a cash flow perspective. So we did look at that. That's just not recommended.
Ergo, my question that Mr. Buckley answered. My last question was one I didn't think of
until I saw the photos.
Is there an inherent challenge with maintaining the driving range since it's an uphill slope?
Gravity always-
It was looking at the puddling of the water.
It looked like it was good for ducks.
That's all.
Yeah, of course.
Orgis.
That's always a challenge.
And I might have Tom answer that, because it's not the only course that's on a slope.
So I'll speak to how that is managed.
And does the new design, and then does the proposed new design help to address that?
Yeah, it's definitely a challenge, right? Gravity is working against us. Not to mention the age of
the drainage that's out there. I will say having been a part of, so we operate 44 golf courses
through the western United States, haven't been a part of a lot of driving range projects. One of
the things that increase the overall price of this is addressing the fact that it's on a slope
and making sure we don't run into these future problems. So that's the good news from this
project and the work that's gone into the design as that's been addressed. The bad news is we're
we're gonna have to pay a little more for it,
but the net result's gonna be very positive.
Okay, thank you.
Thank you, Mayor, for allowing me to ask my questions.
Anybody else?
We got a couple questions and comment on this
in writing ahead of time,
and I know we talked about a lot of these
at the finance committee,
so I was gonna go ahead and just talk a little bit about it.
So the concern that the author had was,
is Measure O involved in this?
And the answer to that is?
No, there are no measure of funds
as part of the Enterprise Fund or specifically this project.
And then if we elect tonight to go with financing out
of the city's general fund to the Enterprise Fund,
and then we go out for a subsequent bond issue
to help fund Heather Farm, is there
a possibility to roll this funding into that
and increase the total bond that we're going out for?
There is that possibility.
I might have the city manager
or the admin services director answer that.
That's my understanding though.
Yeah.
That's correct, it is a possibility
if we wanted to revisit that in a year or so.
And by setting the interest rate
as proposed by the treasurer at 2.75,
my understanding is that rate was being set.
So if the city had put that money from the general fund
into its existing reserve and was earning interest on it,
that 2.75 would basically be roughly equivalent
to what we would get just putting in our reserves
so that there is no impact on the city's general fund
from this loan other than potentially
increasing our ability to get good bond financing
in the future.
Right, there's no expectation
this would be an interest-free loan
that would be significantly impactful
to the general fund, the opportunity cost.
So yes, that's the intent is that there is a return
out that the general fund is more or less made whole at the end of the term.
Yeah. The general fund is whole. Measure O is not involved, and we do have flexibility
that we wouldn't have if we went out to the bigger bond market. If we did that now and
we did subsequent bonding for the pool, we wouldn't have the option to pull this funding
into that because the same situation we're in with the financing for the food and beverage.
It would just be much more complex to do that.
Yeah, you'd have to make it a callable bond
and all that stuff, so.
Okay, all right.
Other than that, thank you for presenting it
to Finance and tonight, here tonight.
Okay, I have a couple of questions.
I actually got to go to a top golf place in Evans,
well, it was Augusta, Georgia,
but it was in the pouring rain
and it was also with a tornado advisory.
So it was pretty empty.
So I don't know that I get the real feeling
of what a top golf station is, but it was fun.
This is not a question, I'm getting to the question.
It was fun to watch the TVs
and see where your ball is really going.
Does the actual course close during rain ever?
the horse itself or just the range.
The range does, we close, if it's severe, lightning,
we will, but generally golfers,
have you seen Caddyshock, they like to play in the rain.
Right, they got their umbrella, okay.
How many stations, will it increase the capacity
in order to get your numbers?
We're roughly about the same number of stations.
The revenue we expect to increase
because people will get more people playing, volume,
Two people stay longer, get more balls,
and the fees might go up a little bit too
as we look toward the future.
Is there any chance, because top golf was really fun,
is there any chance that people will want to do top golf
and the course will suffer in terms of their revenue?
Meaning the driving range and the top tracer system
that we put in there, do you think people-
Yeah, people just really enjoy that way more
than going out and actually having to figure out
where the ball landed.
Yeah.
Sure.
So that was a big worry.
You know, this segment of golf is called entertainment golf.
And it was a big worry of the industry probably 10 years ago
when it really started becoming mainstream.
And we've actually found the opposite.
We're creating new golfers through this entertainment.
We're getting people out there that were maybe intimidated
or then were inclined to pick up golf.
And now all of a sudden, there's a golf club in their hand.
And so our instruction programs are increasing
and participation on the courses
are actually increasing as well.
So it actually, we expect that there could be
some side benefits that aren't even in these numbers
as we move forward.
Okay, thank you.
And the time to convert, as I remember
from the original presentation,
was about six months to get it running,
and nothing ever goes that well,
so we should have it by Christmas?
We're targeting November of this year
is when we will reopen.
We think four to six months
is about the construction time,
depending on all those variables.
But yeah, the growing season is fairly limited.
So our window is we need to get started by the spring
or early summer at the latest.
All right, thank you.
I don't have any high intellectual questions, sorry.
I think right now it's time for public comment, yes.
Is there any public comment available?
Bob Kruger, Walnut Creek resident,
61 years of a mile from Boundary Oaks Golf Course.
There hasn't been much negative comments
towards this proposal, more on financing,
but I will say that out of a mile from the course,
I will travel to Concord sometimes to use their facility
because Boundary's facility is very substandard
for, I think, the city of Walnut Creek.
It is a big investment, but I will say that,
while I would agree that range revenues
will definitely increase, courses like Hagan Oaks
and Sacramento put in this technology,
They actually have food trucks, they have music
and bands out there at times now.
It's been very successful.
And I think given the investment in the clubhouse
and the taproom, there is also some untapped revenue
for people sticking around, going to the range
and enjoying the experience.
I think they will see some ancillary revenue coming in
from the tap house and overall,
I think the restaurant operations at the core is people
at driving range, some enjoy having a few beverages
hanging out at Diablo Creek Golf Course in Concord.
They have a restaurant bar that's right by the driving range
so people tend to linger, spend more money at the facility.
So I think it's gonna be good
for the overall customer experience
and Boundary does get about plus or minus
70,000 rounds a year out there.
So that's a lot of people using the facility.
So I think this will uplift it to,
I think represent the quality of what Walnut Creek residents
should expect from a public facility that's been there
since 1969.
That's my comment, thank you.
Thank you very much.
I don't see a long line or any line for that matter.
I'm looking, I'm not seeing,
I'm seeing heads go like this.
All right, I'm gonna bring it back to council.
Are there any additional questions or comments?
Not questions, just comments.
Really appreciate that comment actually by Bob was it
from the public, obviously you know your golf.
First of all, it certainly makes sense
to keep money in the house.
I think that's a no-brainer in this instance.
The driving range absolutely needs,
it's more than a facelift.
We need some plastic surgery reconstruction on this,
so I'm really glad to see this.
And in terms of becoming a city entertainment center,
you mentioned top golf.
Just my own anecdote is my son's,
well, I guess fiance now, that I think,
wow, I've been saying girlfriend for four years,
fiance now, she has never golfed in her life and she suggested twice now, well
I've been there in the house, to my son, oh let's go play top golf. And they
went down to San Jose and another time they went to Roseville, so the fact
that we're now local, I think we're gonna see so many more people that normally
wouldn't be on the golf course. You're probably gonna be here in a couple of
years asking us to put up some kind of a food service station or some kind of
ability to be able to have people serve food from the Tap House. So I think this
going to be phenomenally successful. I do think it will actually add more golfers
and I'm looking to have a the top golf light in Walnut Creek. So thank you all
for this and as the other member of the Finance Committee we took this issue and
pulled it apart six different ways till Sunday. It is a good win-win situation. We
have the money to loan ourselves. We can save on interest rates. We can save on
bond financing costs up front,
we can save when it comes time to make the decision
about the bigger bond issue,
and it really protects that commitment we made to our voters.
It's not measure O, it is general fund.
We're keeping those separate,
and we're finding a way to increase the pie
so that we are even better able to move forward
with Heather Farm when we're ready to do this.
So I'm prepared to support it.
Matt, would you?
No, I was a little slow on the draw,
But I did have a few questions.
I'm also supportive of the project.
Sorry, Kevin.
More goes to the driving range.
So what do we anticipate the estimated
life of the new range will be?
I mean, before we have to come back here again
and ask the same questions, so we're thinking 30 years or so.
Just given what was described about the slope,
It might last longer if it were flat,
but there are challenges with nature,
but yeah, 30 years is a good investment.
And the one that's, what we have now is original
back to 1969 essentially with some lipstick on it.
Right.
Not reconstructive surgery.
You mentioned, you made an allusion to the cost,
and if you could maybe just refresh my memory,
my understanding is it's, and I'm not a golfer,
so it's about eight to $10.
you purchase a bucket of balls,
and that gives you access to the driving range.
Does the council set those rates
so that there were to be any increase,
that would be something we would have to approve?
The council establishes ranges
within which staff and our operator
establish the fee rate.
So we're happy to have those conversations
when we bring this to you,
when we reopen the facility,
we'll have a range,
we'll talk about what the current fee is,
and what the proposed fee is,
so you'll have a chance to see that,
but Council doesn't typically set the specific fees.
But it would extend to something like the driving rate?
Yes, for sure.
Okay.
There was a reference in the staff report
to there's a little bit of budget creep,
and I know we've already accounted for it
in our capital budget.
How confident are we in our current,
in our $4.7 million a year?
Yeah, so when the Council approved the capital budgets
for the current fiscal year, at $4 million.
We were still working with our consultant
to establish what we thought
the estimated construction costs would be.
It has gone up a little bit.
At the same time, we've reduced other amenities
that we thought we were going to add to that.
Somebody talked about a food station,
or pulling that out, doing other things.
So how confident are we?
As confident as, this is gonna sound like a dodge,
but as confident as we can be at this point
for a project we haven't done here, ever,
but working with Coorsco and working with our designer,
these are the numbers that they feel confident in,
work in public works and our other project manager.
This is where we think we're going to end up
and we'll know when we bid it out.
And obviously we can make some adjustments to the contract
such that if we're looking at keeping at this target,
you know, the 4.7, we will do that.
That's our goal.
That's the money that you're providing to us.
So we will stick within that target.
So is it fair to say we have pretty detailed design drawings
that we've gotten estimates from professionals on.
We don't have bids.
Correct.
We have, sorry, to your question.
Yes, we have detailed design drawings.
We're almost at 100% there, having
looked at both by our designer and our project manager,
who's external to this, has looked at those figures.
And so we're probably 95% confident in them at this point.
And we'll go out to bid soon.
One of the other questions I had was about kind of food services.
So that was taking, that was to keep the budget contained.
What would that, I'm just curious kind of,
if we were to add that on later,
kind of what the costs of that are?
Is there a way to do that with food trucks
or kind of a more?
Yeah, so they're, I keep interrupting you.
There are options for us both in terms
of the existing service, the tap house.
You know, we could have a more direct line
from the tap house, which is not that far away,
but people may not see it or know it's there.
and have that service brought up to the range
and or food trucks could be part of this experience
that we bring into the course at certain times.
We're also putting in utilities such that
if we do decide to put in a food service
and it would be fairly casual food service,
but we could do that in the future.
So those options do exist.
Those were all my questions, thank you, Mayor.
Since you're already on the mic,
do you wanna make any comments or?
You know, I think that this improvement appears long overdue.
I think that it's interesting to see the numbers,
just how successful the golf course has been,
but the driving range as well
and how it's increased revenues.
Talk to golfer friends and neighbors
who value this resource and wanna see it continued.
So I think this means of doing the internal loan,
we do have these one-time funds,
that it makes sense to do this.
I appreciate council member, Mayor Pro Tem,
Darling's comment that we wouldn't be in a worse position
than if we had invested these funds,
that we would be in a same or similar position.
So with that, I'm prepared to support the proposal.
Okay, council member Wilk.
Well, if everyone's gonna sit here and smile and nod,
I'll make a motion to approve.
And I will second that even though I still doubt
that a driving range will ever really allow me
to swing a golf club correctly,
but I'm gonna keep trying, so I will second.
Okay, we didn't get a comment from Council Member Silva.
I would just wanna thank staff and Corsco staff,
as well as the members of the public
who participate and give feedback frequently on this.
I think this is long overdue, as one of my colleagues said,
and I think it is for a very good golf course
that is well respected in the region.
many of our local golf courses are struggling for,
and so I'm glad we're able to do this.
I actually think the technology solution being put in
could actually allow us to have extended evening hours,
even on a Friday or Saturday night,
when you can't get out on a dark golf course
in the middle of the night, probably not a good idea,
but you could go up and play there.
And I think the borrowing from ourselves
or lending from the general fund to ourselves,
That's what we used 12 years ago when we needed to pay down our pension liability obligation
and it was successful then and this should be successful now.
Thank you.
I have heard from more than a few people that Boundary Oak is probably the best public golf
course in Northern California.
that highly respected and the driving range was adequate.
I'm not a good enough striker to even get past a halfway
up the hill, so it didn't make a lot of difference to me,
but there were a lot of people that will be able
to improve their skills and enjoy it even better.
Okay, we even have one here.
So, I am excited about this.
it's been threatened for years and it's finally night the threats finally going to come through
so i'm going to support it too i have a motion and a second i only need a roll call council member
wolk aye mayor pro-tem darling aye council member france wilde council member silva aye mayor haskew
aye motion carries unanimously looks like it's a good deal all right that being the end of our
items and the agenda. We are calling this meeting closed.