Golf Advisory Board

Plan for the Future

Executive Summary• Pebble Creek was, is and continues to be an asset for

the community.• Pebble Creek is a destination facility• Utilize in all strategic plans for growth and

development.• Don’t decrease the tools in your tool box to attract

growth• Reinvestment is a must, now is the time• Self sustaining from an operating perspective, CIP will

require investment from the City

Management Philosophy• Commodity Strategy: offer product based solely on the

lowest competitive price, with hope of producing large volumes of business. No reinvestment, improvements deferred, short falls funded from another source. Usually only works if you can be the lowest cost producer.

• Innovative Strategy: provide a value based customer experience at fair market value with constant, systematic capital investment with the goal of generating both local and regional participation. Not based on volume, usually the best long term financial results. Key is the value component.

• Golf Advisory Board recommends continuing to implement the Innovative Strategy.

Target Market – Championship Course• Avid golfers and golf enthusiasts• Often referred to as "Core", "Die Hard", "Golf Nut"• Playing by the rules matters to them• Familiar with golf etiquette• Expectation of something special• Understand the terms slope/rating/handicap• Want a great playing surface, especially greens• Will drive for quality and value• Both male and female (majority are male, although female segment is

growing)• Equal split of children in the household or not• Live and/or work within a 50 mile radius of Becker (primarily toward the Twin

Cities area, generally does not include St. Cloud)

Target Market – Local 9• Often referred to as "Casual", "Recreational", "Golf Enthusiast"• Family Oriented - kid friendly• Relaxed mentality - rules don't matter, it's a social experience• Equal split between male and female, most with children in the household • Want to be able to hit it, find it, and hit it again• Not as concerned about playing surface as long as it's adequate• Beginners paradise• Rules and etiquette - who needs it• Could care less about slope/rating/handicap• Recreation Enthusiast• Live within a 20 minute commute time of Becker• Community Course• Time Constrained Golfer – 9 Hole option

Competitive Set – Championship Course• Wild Marsh (Buffalo)• The Links at Northfork• Monticello Country Club• The Territory• Fox Hollow• Greenhaven (Anoka)• Rush Creek• Baker National (Hennepin Parks)

Competitive Set – Local 9• Angushire• The Vintage (Otsego)• Stone Creek (Foley)• Pine Ridge (Elk River)

Keep in mind, not all competitors are golf related – movie theaters, bowling alley’s, water parks, anything that consumes discretionary dollars.

SWOT Analysis - Strengths• 27 Holes - creates operational options with the Local 9• Positive Reputation and Image - people have brand recognition when they hear our name• Location - 1 mile off Highway 10, access from I-94 is relatively easy• Layout and design - entertaining, short distance from green to tee, 4 sets of tees, picturesque,

playable for all• Cash Flow near positive - consistent improvements last few years• Xcel Energy - large tax payer, 75%, reinvestment will never be more cost effective• Greens - high quality turf allows premium playing surface when manicured correctly• Great Value• Traffic generator for the community• Helps to make Becker desirable, reason for people and businesses to locate here• MSHSL contract• Master Plan• Kid Friendly Focus• Multiple Revenue Streams - F & B, FootGolf, FlingGolf, Practice Facilities, Pro Shop, Green Fees, Carts• Helps build community involvement – through leagues, volunteering, employment opportunities

SWOT Analysis - Weaknesses• Location - Outside the metro loop of St. Cloud and Minneapolis/Maple Grove• 27 Holes - cost to operate• Supply of Golfers• Local Government involvement - lack of unified vision• Leadership at elected level - negative PR• Clubhouse - End of Life• Vendor Difficulties- high turnover has led to a bad reputation, decreased

bookings due to concern of being open, inconsistent service, negative word of mouth, need to rebuild from ground zero

• Lack of re-investment in property, plant, equipment, causes large hurdle now

• Negative PR from local residents • Irrigation System – end of useful life

SWOT Analysis - Opportunities• Partner with BCC to cross promote disc golf, and Local 9 FootGolf and FlingGolf• Large population of youth in Becker• Group Rates - Discounted or something to add value• VIP Pak• Levy - source of revenue for CIP • Recruitment of Superintendent to fill vacancy when current superintendent retires

12/31/15• Tool for Economic Development and Recruitment• Partner with Big Lake• Master Plan• Food and Beverage - package with golf• Support from elected officials• Reward Fast Players - time is a concern why people don't play• Educate the public on the true cost of operating Pebble Creek - data and numbers

SWOT Analysis - Threats• Negative PR• Local government leaders• Developers• Losing Xcel Energy tax base• Decline in golfer base• Limited re-investment over the last 15 years• Do nothing approach - asset is already at end of life cycle• Lack of Business Decisions at elected level - Decision making process• Lack of support for plan moving forward• No long term vision - focus on immediate results• Don't kill the goose - re-invest and be patient for return on the investment

Advisory Board Hypotheses• City continues to own and operate facility for the forseeable

future• Food & Beverage remains under the control of the city• Systematic reinvestment by the City through the levy to fund

the CIP and Master Plan projects• Current format with Championship and Local 9 courses• Innovative Strategy continues with a focus on providing value

to the customer by reinvesting in the asset• Minimal rate increases in the next 5 years• Projections are based on 25,000 annual rounds• Projections do not include depreciation

Advisory Board Projections25,000Estimated Rounds used in Projection$29.00Estimated Revenue Per Round

Advisory Board Projections

Year 1 Year 2 Year 3 Year 4 Year 5Rev/Rnd Rev/Rnd Rev/Rnd Rev/Rnd Rev/Rnd$29.00 $30.00 $31.00 $32.00 $33.00

Revenues:User Fees $ 725,000 $ 750,000 $ 775,000 $ 800,000 $ 825,000 Tournaments $ 100,000 $ 105,000 $ 105,000 $ 110,000 $ 110,000 Merchandise Sales $ 105,000 $ 105,000 $ 105,000 $ 105,000 $ 105,000 Food & Beverage $ 235,000 $ 250,000 $ 265,000 $ 275,000 $ 285,000 Total Golf Revenues $ 1,165,000 $ 1,210,000 $ 1,250,000 $ 1,290,000 $ 1,325,000

Expenses:Operations (2) $ 325,000 $ 335,000 $ 345,000 $ 355,000 $ 365,000 Maintenance(3) $ 485,000 $ 490,000 $ 497,000 $ 510,000 $ 522,000 Carts(5) $ 120,000 $ 125,000 $ 128,000 $ 130,000 $ 130,000 Driving Range/Pro Shop $ 85,000 $ 85,000 $ 85,000 $ 87,000 $ 87,000 Food & Beverage(4) $ 185,000 $ 190,000 $ 195,000 $ 200,000 $ 210,000 Total Golf Expenses (1) $ 1,200,000 $ 1,225,000 $ 1,250,000 $ 1,282,000 $ 1,314,000

Total Cash - (Need) $ (35,000) $ (15,000) $ - $ 8,000 $ 11,000

(1) Expenses exclude depreciation and includes lease payments (Capital & Interest)(2) Operations Depreciation $40,000(3) Maintenance Depreciation $80,000(4) Food & Beverage Depreciation $35,000(5) Carts Depreciation $65,000

Advisory Board Recommendations• Move the golf course from and Enterprise Fund into a Special Revenue Fund, similar to the

BCC, with a separate revolving capital fund to more easily define the true cost of owning & operating the golf course.

• Continue to reinvest in the facility via the Master Plan and CIP, funds provided through the levy

• Continue the F & B operation as a City function • Update the clubhouse –utilize a professional source to help determine space needs and

how to work with existing shell to better utilize, increase operational efficiencies, and better serve customers.

• Eliminate the negative PR generated by elected officials who should be champions for the facility.

• Be cautious not to cut to the bone when trimming expense.• Give staff the support and resources to perform their duties• Opportunity to increase Food & Beverage through events and weddings.• Challenge staff to sell golf events, weddings, banquets, anything to fill the building• Keep it simple, provide value, execute at a high level