Tri-City Council - workshop

Good afternoon. We're going to call this meeting to order. This is a work session of the City Council today, Tuesday, September 1st. I will ask for a roll call, please.

Mayor Watkins.

Here.

Vice Mayor Samely? Here. Council Member Dikins? Here. Council Member Savage? Here. Council Member Staley? Present. Council Member Walker?

Here.

Council Member Ward?

Here.

We have a quorum. Thank you. We'll go ahead and stand for the Pledge of Allegiance given to us by Jim Dikins. All right, the council may go into executive session for legal counsel in accordance with ARS 38-431.03 to discuss any agenda item. The following items may discuss considered in decisions made relating thereto. Number one on our agenda today is the golf course marketing report by James Keegan. JJ Keegan will be reporting on the completion of the golf course marketing report with the mayor and council. Manager Walsh.

Thank you, Madam Vice Mayor. We have J.J. Keegan here. He's got a presentation. He's put together quite a large amount of work in researching our golf course, understanding what's going on there, you know, looking at all the good, the bad, the ugly, and has some great recommendations to share with us tonight, so.

All right, great. Mr. Keegan, come on up. And Council, I know we're not in a work session setting, but please feel free to make it informal, as the mayor would say. Mayor Watkins, if you want to jump in, make this as interactive as we all want to be.

It's certainly a pleasure to be with you here today. I'm really looking for this to be a workshop of give and take, asking questions so that you have a firm understanding of the operation of the golf course. What I don't want it to be is a lecture where I just go through twenty five slides and just give you information. Because what we've already provided you is we've provided you a hundred and sixty one pages in terms of a strategic plan, a thirty six slide presentation that we have amended since it was delivered last Wednesday incorporating some new information on water, 11 pages on key findings and recommendations, and two pages on the cliff notes. It's my anticipation, with the exception of Smiley, who has told me he's read it all. That is a daunting task for you all to do in a short period of time, so please ask any questions that you have on this plan so you can understand it. Here's the essence of it. You have two problems. One's an operational problem in which you're losing a half a million dollars a year. And as a result of losing a half a million dollars a year, you now have deferred capital of 11 million dollars that should be invested in the golf course. that's a big number and so when you say eleven million dollars what does that really comprise what's critical what would make the course competitive and what would make it brand new with a complete new renovation the eleven million i'm pleased to tell you would be a complete comprehensive overhaul of the golf course but regretfully what's critical is the irrigation system that since nineteen ninety four Pat and has done an amazing job in maintaining the course but they spent over $200,000 this year just on irrigation links. And so when you look at losing a half a million and you can attribute 200,000 to one factor, at some point in time the irrigation system really has to be addressed and replaced.

I have a question about that. Yes. I feel like this is maybe a little bit of a misnomer that the irrigation system has been in place since 1994. for spending $200,000 a year in repairs, how much of that system from 94 is actually still in existence, and how much has been replaced with newer heads and lines?

I'm going to let Pat answer that question, because he knows the answer exactly.

OK. Could you come up to the podium? Otherwise the mayor can't hear you, and he's pretty important. Thank you.

Sorry about that. Thank you for the reminder. Don't have an exact linear feat of that but I can tell you that as pipe Bursts on the golf course, especially on what we call the inner loop, which is the original nine holes We replaced sometimes we get say a cracker. That's this long like 12 inches long. We replaced 20 feet. Mm-hmm So we go in there. Mm-hmm We've been doing that I would say I've been with the city nine years I've been at the golf course nine years We've been not only replacing those, we've been putting isolation valves in to help, you know, so all this water that we're losing when something breaks, we're able to isolate it quicker, cut our loss down. But it's a constant revolving door.

Sure.

It really is. I don't have an exact figure, but I can definitely get you one. We do track.

Would you say that, like if we were just talking about sprinkler heads, would you say that there are still heads left from 1994? There are. And how many do you think, if you had to just guess a percentage?

So I would say there's probably still 32% to 35% of the original sprinkler heads in the ground. If I had to put a percentage on the pipe, part of the misconception of this, remember when he states 1994, that's when the additional nine holes were added. We really don't have as many problems in those areas that we do in the original. The original is from the 50s. I mean, that was put in the 1950s. That's what we spend most of our time on. So we're really close. I can tell you that. We've got some holes that we're really close being end-to-end with all brand-new pipe. Okay.

And then this figure that we're given, this large multimillion-dollar figure, that is you suggesting that we should dig up the irrigation and start fresh?

That would be a complete new system, yeah. And that would include a holding pond, pump stations, fault sensors. It would be what's called PE pipe, which is polyurethane, rather than the PVC that we're putting on the ground now because our earth moves. You can drive a tank over this stuff and it won't break. So that would be a complete 18-hole renovation.

Okay, thank you.

You're welcome.

Hi. Does the golf course use reclaimed water at all?

We do not. We do not have access to reclaimed water.

Is that something that's possible?

I believe it's been researched in the past, but I don't have that information.

All right. Thank you.

When I first started here, they talked that it would take $3 million to get it piped back to the golf course from the treatment plants. So I think that's when they decided to start injecting it into the ground back then. So that's kind of what the reality of it is. We have big ponds that we'd be able to do that if we could get it back there, though.

And just along that, I think when the decision was made to go with the injection well, they looked at three different options. One was piping it back up to the golf course and Centennial Park. Another was piping it over to the industrial park and selling water over there. And then the third was the injection well. And the injection well proved to be most economical. That's why I went that route.

two issues. Operational losses have occurred for a period of time that has resulted in the accumulation of a large amount of deferred capital. I've been very fortunate in my profession traveling around the world assisting municipalities. My background is shown here in terms of the books I've written, the courses I've traveled to, and the advisor. I've been very fortunate in that the books that I have written are used by seven universities in terms of How do you optimize the financial performance of the course? Because our focus is how do we create value for golfers on a foundation that optimizes the financial return to the city? The reason golf courses, while the golf course is in a general fund, most cities find it in an enterprise fund because parks, swimming pools, would never be funded by private enterprise. Golf courses are funded by private enterprise throughout the country. There's over 9,000 courses funded by daily fee operators against the 2,900 courses that are municipalities. But what I wanted to do today in terms of the agenda was where we began in terms of the scope, the seven steps that we used, share with you demand against supply here in the valley, the cost of operating in terms of water technology, when you see what the water costs are and how they've exploded in the last 48 months, it's really kind of shocking. The operation today in terms of system pricing, and then one of the questions was, there was a thought that upon delivery of this report that you would want to issue another RFP, Regarding the governance should we bring in a management company? Is there somebody that would lease it? We're gonna answer that question for you today based on the numbers So what we do when we look at a golf course as we go through seven factors the demographics the age the income the ethnicity and the population density that determines the probability that a golf course would be a success and If I can use an example, I got an email over the weekend from the Alamo City Trail. They were willing to spend $4 million on Mission Del Lago. The golf course is in an area that's 80% Hispanic. It's slope rated at 134, meaning it's very difficult, and they're losing $500,000 a year. Yet just like your irrigation system needs replaced, so does theirs. In the email he sent me, he said if it was my money, there's no return on this, but for an investment in the city, The Alamo City Trail should make this investment to enhance it for the residents in that part of town. We look at the weather in terms of the playable days. There's only 191 in Minnesota, and so the labor and the staffing versus a golf course like yours that has over 330 playable days, you're in a really great location. And the reason that's important is because the number of playable days determines what your season passes should be priced at. The more playable days, the higher the fee should be. Then we look at the controllable factors, the technology that's being used. We have 17 benchmarks that evaluate the financial performance, the assets, the operations, and then we looked at the, did a community survey. We had over 900 residents respond to the survey, which was really good. Amazing is 29% of those didn't even play golf in that we had created a skip logic within the program to ask the residents in terms of their feeling on the golf courses, differentiated from the golf courses, and we separated those results out. So there's some really good news. You've got 332 playable days. It's the sole course within a 30-mile drive time. The golfers rank at first in terms of value and price. The greens are very well conditioned, and the staff is appropriately sized. And the rounds since 2019 are up 49%, which almost mirrors what's happened across the United States. The weaknesses are, unfortunately, the golf course in terms of green fees, carts, season passes are only netting $25.67 against a non-resident rate of $67. Name for me a business that would be profitable if it was only making 38% on its cost of goods sold, on its rack rate. It becomes a challenge in terms of pricing. The utilization here, despite the fact that it's only a course in the area, nationally now courses are operating at 70%. Airlines and hotels, the benchmark's 80%. This golf course is still at only 52.8% operating. Unfortunately, the accounting schema in the golf now system was by a prior employee, as there is a note in the report, they set it up in a way that did not create meaningful reporting with respect to how many rounds are played. If you go into the software, you can see some numbers saying 53,000, some say 42,000. The disparity in terms of the ability to do forensic detailed analysis was compromised because of the accounting schema within the Gulf Nail software system. And we talked about the irrigation system. But there are opportunities. The rate card in what we're proposing would raise rates revenue from 83 to $158,000. We received a proposal from Covered the T that they will invest on their behalf at their expense $600,000 to put in Top Tracer. Think of Topgolf. It would be just like that on your range where people could come and rent it by a half hour or hour and play Augusta or Pebble Beach. There could be a food truck out there. The average range that goes in, if I were to use Augusta Ranch down in Mesa, Arizona, when they put it in, they spent $465,000 and they thought the return was gonna take them three years, took them 18 months, they're now generating over $900,000 in revenue, where previously they were only doing $120,000. Kathy Harbin, who is here, she's a member of the PGA's board of directors, she's part of the LPGA. Kathy owns a golf course in Texas, in Paris, Texas, middle of nowhere. She put it in, she was only doing 50,000 on the range, She did a quarter of a million dollars on her range when she put in top tracer just in range revenue. So the opportunity to narrow your deficit is to generate, how do we generate more money on rates and the range is one possibility. Also, grant funding's a possibility for the irrigation system as part of conservative efforts and we cited four different sources for that. Now the threats, the water is now up to $900,000 and it's gonna be over a million dollars in the next couple of years. It's increased 60% in the last two years. It's an appreciating asset. Capital investment should be made. And there's lots of regional competition beyond 30 minutes. Well, your demand over supply is really significant within the 10-mile range. When you start including 40 miles, supply exceeds demand by 25%. And when you extend it to a 70-mile radius, supply exceeds demand even at a greater percentage. So there are those threats that exist because I know the firemen one time I heard were looking to take their annual tournament to Laughlin Ranch because they got such a discounted rate. it really becomes quite a conundrum in terms of the asset that you have. Let's talk about what so you understand what's happening with Golf Nationally. And do you have any questions so far?

Yes. You brought up Laughlin Ranch. Is that privately or publicly owned? Privately. Privately. Thank you.

It's a daily fee operator that is doing the real estate development. And, Sean, it's an unparalleled experience. The clubhouse is absolutely exceptional. It's a swimming pool. It's a whole community center. And the golf course is of a championship caliber with stunning views and vistas. I went out and played it. It's really good.

To add to that, so I'm assuming there's HOA dues that help support that? Okay. Thank you.

And they have the ability to buy annual passes. And they can also have annual cart passes if they're a residence of the community. The fees for them, it also includes access to the swimming pool and to the clubhouse. And the restaurant in the clubhouse is extensive. It probably could seat 150 people just within their clubhouse area.

And just for the record, I have a couple questions before you carry on. So just for the record, the fireman's golf tournament, it wasn't solely because they were getting a discount at Laughlin Ranch. It was also course condition. They didn't appreciate our course condition. And at the time, it was very unattractive. I did have a question, though, on playable days. Did you do a comparison with, I mean, Havasu gets very, very hot. Some of the surrounding golf courses get very, very hot. So was that factored into as well and increased our playable days over their playable days?

We have a definition that's used nationally by the National Golf Foundation. It's a temperature from 45 to 95 degrees with less than two-tenths of an inch of rain with less than 18 miles an hour of wind speed is deemed to be a playable day. And so I have a chart coming up here, Cherry Sid will show you the exact calculation of 332 playable days. You have some frost delays in on December, January, February, but they're still, they are considered playable days by and large. Okay. And I'll show you the chart here.

Yeah, no, I've seen the chart, but I just, I wanted to see if that was considered. Thank you.

The golf industry had gotten down to, prior to the pandemic in 2019, 420 million golfers. Today, it's at 549 million rounds that are played. Rounds at Servet Cliff are up 49% since 2019. That's absolutely spectacular. But what's really interesting is that the youth, people of color, and women are up 58, 61, and 46% over three years. And what's driving it is the off-course entertainment, hence the opportunity with Cover the Tees to put in another recreational amenity here in Kingman that would attract those people to come and learn the game of golf and enjoy recreation for an hour. From a city's government perspective, my heart goes out to you, without property taxes, you're really constrained in terms of what you can do in terms of capital investment. The sales bid in restaurant taxes at $42 million. You know, your city's net position's only 172 million. The job Tim and Tina and the staff do here with the resources that are available is really impressive. But what you look at in terms of making a decision on council is what's that community benefit? parks, trails, playgrounds. What's a shared benefit? Modest fees, like a swimming pool. There may be fees for lessons. There could be tennis court fees for lessons. But an individual benefit, most municipalities view it as that the golf course should be economically self-sustaining and on its own. We could debate this. It's the entry door to the game. But the theory is that the golf course should be economically self-sustaining. Well, your demand over supply is you've got 62,877 people within a 10-mile radius from one golf course. In theory, nationally, there's only 21,000 people per 18 holes. You've got the demand of three to one over the nation, which puzzles me as to why your utilization remains at only 52% when your demand being so high in relationship to the utilization. Unfortunately, though, the local demand is price inelastic. As you can see from this chart, based on the mosaic profile, Experian classifies all of us in terms of categories. Sophisticated singles, bourgeoisie prosperity, career and family, comfortably retired, hardworking blue collar. Four of those categories determine the predisposition. So if you're in Newport Beach, California, It's the largest Lexus, largest BMW sales in the world. And so their Mosaic profile's at a plus 45, and so they can support at Pelican Hills $300 green fees. Here, the Mosaic profile is negative, meaning they're looking for value-based golf. And so the nature of the course with its slope rating, it's too difficult to attract most of the players and most of the residents to come. And so you've got an imbalance in terms of the asset and the experience being offered versus what the masses of the town would like to see. So when we look at the average household income in terms of within the average golfer's $122,000 average household income, Here, within the 10-mile radius, it's 84,000. These statistics are from Argus Online, ESRI, that are used by parks and recs across the country. Your median age is 48, as differentiated from 39, but the golf participation is 6.5 versus 6.3. The income and wealth run about a third below national figures here in Kingman. So that becomes a really dilemma for you in terms of setting rates. Do you charge what's necessary to have the courts be economically self-sustaining? You have the demand. Or are you more altruistically based and wanting to provide this as a leisure funded activity of city council? Comfortable retirement households are 22% of this population versus 9% nationally. Those areas in blue are areas that are more conducive to golf. Here, Sheriff, is the calculation in terms of the number of playable days, 48, 98, two-tenths of an inch, win under 19. It ranks among the most weather-favored in the country. You have 91% of the calendar you can play year-round golf, and your capacity is around 82,000 rounds versus the reported 42,000 rounds you're now doing. You can see year by year in terms of the variations in terms of weather in this calculation. It's used by all golf courses across the United States. Are there any questions on that in terms of playable days? If you were to go merely to get the national utilization at 69%, you're sitting on $566,000 of revenue. If there is sufficient demand, if the rounds recorded versus your utilization rate, your 10-year utilization rate's only 36%. You've got 18,000 rounds. If you were as competitive as other courses in the nation, at $30 a round, it's $566,000. Because golf is a fixed-cost business, every single incremental round is going to go straight to gross revenue, straight to the bottom line. Technology, it's a constraint beyond everything. We talked about the divergence in the rounds reported. Go ahead, Jamie.

Move on. I'd like to go back to the previous slide that talks about, you know, we can solve this gap of $566,000 by marketing. In this report, do you break down the marketing plan that we were looking for, what the staff needs to do, how they need to market, in order to increase these revenues? Mr. I think it's in Chapter 12. Ms. Twelve. Okay.

Mr. Could be 11 or 10. What we talk about, if we do an entire evaluation, and then we talk about the newsletters that are required, building the customer database, doing bi-weekly newsletters of what's going on. And so, the whole social media thing and what can happen, it all starts with building a database. As you're going to see here in a minute, the database of email to contact the customers is kind of slight. Are you okay to go on? The constraint between everything only, there are 15 reports you need to operate the course correctly, only four exist. The department, there's duplicate departments. The kits, meaning the way they're reallocated, the active SKUs went from 79 to 298 SKUs. And there's 30,664 names in the database. But, Jamie, 53.4 don't have any kind of customer record attached to them. So our ability... the city's ability to market to 53%, 16,000 people were missing it. What Mike is doing an excellent job of is he's now capturing all of the names of every golfer that comes. So they've begun the process of building a database from which email marketing can occur as a way of attracting and retaining the customer. with the correct software system that you do not have, an email would go out thanking them and getting customer surveys. If the customer was not there in 90 days, the right email system would then send them a notice, we miss you, and here's a $5 off coupon. So there's all kinds of things that can be done in terms of marketing the golf course. If we look at barter and licensing, I've talked about the challenges with the software. 1,229 rounds were sold for the software representing $53,000 in lost revenue. The hot deal discount, they're selling it at $42 versus the rack rate to non-residents at $65. The comparable software, it would have the email marketing, it would have those reports, whether it be Club Profit, 4UP, 10-4, Linksource, all sell for under $20,000 for an annual license fee. Nationally, what municipal operators are doing is that they are, you have a seven-day window for making tee times. Most municipalities now are allowing tee times. The city of Golden, Colorado, in December, they put 100% of the tee times on sale for the entire year. They value price them at $175. Their normal fee's $110. They take no phone calls in the pro shop. All reservations have to be made online. The city of Eagle, Colorado allows people to book 90 days in advance for a $25 per person reservation fee. Steamboat Springs does the exact same thing in allowing people to book in advance. being able to pay that. Now you have sufficient demand that it may cause a reallocation of some of your residents from prime time to 10, 11, 12, or one o'clock in the afternoon, but there are those who would pay a premium for those early morning times that is being foregone. The financial performance, while there's 80% revenue growth, the gross revenue for the fiscal year ending was 1.6 million against expenses of 2.14 million. These losses continue to preclude capital investment. And we made a calculation in terms of, we did a study for Clemson University PhD. We had over 100 courses in municipalities determine the experience of what is the fair market value of the golf course experience based on the slope rating, the strategy, the turf texture, the amenities, the activities that were available, and the demand and supply. Your golf course is a fair value at $67.75, as differentiated from the average revenue you're realizing of $25.67. It's a fair market value price at $67.75. The five-year projection reflects a net loss of $14.4 million. call on the general fund over five years. You can see the projected gross revenue and the projected golf operating expenses. And this model assumes more than $400,000 in additional revenue from pricing adjustments, trying to raise it from the $25 into what should be a $40 per round cost. The water's excluded and the capital's excluded. And in the chart below, you can see the critical nature of where the capital investment should be made. A, the irrigation system in 2017. Here are pictures of the golf course. It's a skilled team with a failing infrastructure. The greens are a bright spot. You can see in the upper right, that's a clover on a tee. Here's an example of a breakage in the irrigation system and the turf conditions that occur. The fairways are inconsistent chiefly from poor irrigation. The bunkers show drainage failure, and the car paths are cracking, heaving, and edge failures. If we look at water, The FY, it was $4.08 a gallon. Andy Staples, a member of the American Society of Golf Course Architects, he's got his practice in Scottsdale, Arizona. He says if your water's over $1.20 per 1,000 gallons, the golf course cannot be economically viable. Your water costs are now up to $6.75 for FY 26 through May per 1,000 gallons. The increase of water in terms of the 11 months is just absolutely stunning. At the present rate, you're gonna be over a million dollars. And this is, they're using and trying to control the water as well as they can. They're using less water at a higher price. So it's not a question of saying reduce water, they are already doing it. It's the price that's causing the acceleration. Here are the capital requirements. The golf course, the irrigation system, the building and parking, the maintenance equipment, it's 2.6 million. It needs to be replaced. Fairway mowers today are going for over $100,000. We'd encourage you looking at autonomous mowers. They're becoming very popular. The 10-year reserve requirement is $11 million. Operations, and this is where Kathy was here, Jamie, looking at the strong fundamentals in terms of the customer experience and culture. She secret shopped it. I secret shopped it. Mike and his staff do a marvelous job in the customer service and what they've done in changing the pro shop and bringing in items for sale. You can see down at the bottom, the marketing and promotions only got a 14% score. Overall, it was 51.6%. the revenue in the tea sheet management also being really low. On the right is a picture of what cover the teas would look like. It would be a freestanding structure where people could sit. They'd be hitting balls. They could actually hit it on the grass. There are towers that capture the ball flight. And it's compelling. So here's the value gap. I mentioned $25. Just the realized green fees and membership fees is 1787 against $67. for your study are some proposed rate increases. We have not suggested any rate increases for non-residents that are at the fair market value. The real leak in the bucket is season passes, residents, seniors, veterans. And so you'll see we've adjusted those rates anywhere from $10 from $6 to $13 in terms of rate changes that we're proposing. So a resident weekday rate would go from $48 to $60. With a card, it's up $12. On the base green fee, it's up $11. If you were to implement those rates, it would generate $157,000 in supplemental income if rounds fell by 10%, you'd still be up $83,000. Rounds would have to fall by 21%, meaning you'd have to be around 30,000 rounds for the rate increases not to generate the same amount of money. Are there questions on that? The community survey, 923. The average age was 50.3. You remember the citizens' average age was 48. This tends to be, golfers tend to be a little bit older. While the median household income is 84,000 of all residents, of those that responded to the survey, the median household income was 104,000. I know someone, the Golf Commission.

I disagree with this. Don't agree with it. I don't agree with it. I just, I don't, I just... I'm going to trust that.

It's mathematically correct. Of those, the 923 responded, maybe they inflated it. But, Sheriff, we've done this enough that that is, with the average being 122,000, if you take the 104 versus 122, it's reflective of the difference between the citizen and the golfer and the national golfer and what I would expect the average golfer makes here in town. It's mathematically correct. It's what the 923 said they earned.

I still disagree. I mean, you've done several of these, but I also know Kingman, and I know the golfing community.

And I stopped at KFC today and had lunch, and not one person in there is making more than $50,000 that was eating. that if you tour this town, you get a distinct impression as to the worth of the net household income within the city. We've done this nationally. There's been no disparity with respect to what nationally they make it 122. You take the relationship, I would have guessed it would have been 100,000 for the golfers. It's 104. so could they have inflated it? They had the choice of saying declined answer, and so they weren't forced to answer a number on it, and the distribution above $150,000 was really slight. It ranked first in eight categories, value, price, practice, customer service, and the layout. Laughlin Ranch did better in conditioning food and beverage and merchandise. Two-thirds said they would attend Non-traditional programming and 57% said to join clinics. I think that really speaks to the fact if you're looking to do cover the tees, is there a market demand as another recreational amenity for the city of Kingman? I think the answer is yes. And you can see where Kingman ranked in terms of the Rykel test on the loyalty score came in third at plus 44%. What would they change? Bunkers, merchandise, the ranger program, season passes. They want lower rates. Beverage cart and newsletter got the lowest, Jamie, in terms of what's not happening in terms of marketing. The customer recognizes that there's no communication with them in terms of what are the events, the tournaments. If I'm looking to play and there's a tournament on Saturday and there's lots of tournaments on Saturdays and Sundays, I live in Castle Pines. The course closest to me sends out a newsletter and says on Wednesday for the following week, here's our schedule of where the tournaments are ahead. And so you know where to book and what days that are available for you. So it starts with a newsletter. So the question, should you privatize? First of all, you've got a very talented staff here. And Pat and Mike, they're doing a very good job. If we take the total salaries and the fringe benefits at 34.9%, If you bring in a management company, they're going to charge you $100,000. We just did a study for the village of Woodridge, Illinois, and the quotes that we got were $80,000 to $125,000 for the management fee. That's just a consulting fee. All of the salaries of the staff still are paid. That's just their fee for their expertise in overseeing the operation. So if we, and they're gonna pay the existing staff at 25%. They're not gonna pay the same benefits. So the third party is gonna pay the basic Social Security, FICA, some withholding, and some benefits to the senior employees. It averages about 25. So if you take that differential, you would save, just in fringe benefit, 83,000, but the management fee's gonna be 100,000, so it's gonna cost you money to go to a management company. So the central question is not how the golf course to be made to break even. On the present round and MITRC structure, the five-year model's unambiguous. Even after the most optimistic operating assumptions, the golf course can't break even. The question is what level of investment is the city prepared to make over what period of time and what investment is intended on behalf of all the residents, nine in 10 of whom do not play golf? So here are the decisions before city council. Set the financial target. I know in talking with some of you, you would like to see the golf course break even. That's sort of your vision and your mission of what you'd like to see.

Some comment. If we're going to talk about the financial part of things, I just have a question with the disparity between the two and the non-reporting and reporting that you talked about in the very, very beginning. When is there going to be true figures that we can actually rely on?

The numbers that the city has for rounds at 42,000, the revenue is correct.

Okay.

So the $1,652,000 is a correct number.

But that's rounds that have been reported.

At $42,000, there are discrepancies within the point of sale system, but the revenue is accurate.

Okay. So the figure we're working on for revenue, that has been vetted and it's verified? Yes.

No question about it. Okay. And the expenses are vetted and the net loss is a half a million dollars, $450,000. Okay, thank you. Sure, so let me go into the detail on when they set up a point of sale system, it should be by department, green fees, weekday, weekend, resident, non-resident. You would have carts. You'd have merchandise by each of your SKUs. There'd be about 80 different rates for the entire year, time of the day, type of golfer, time of the day, time of the year, time of the season. There were over 298. And so what the prior individual did is he took, oh, let's just put in our point of sale system a cart, a green fee, a soda, or a range and so we combined them into a kit and those kids never got broken out in terms of what each because their point of sale system did not allow reallocate the kids to the right categories versus ringing them up individually through the point of sale system does that help explain it and we do have the correct point of sale system to mike's credit and pat's and mike mersman's credit they met with upon the discovery of this on june twenty one and twenty two when we were here, they called Goffnell and they've reconfigured the point of sale system so that reporting for this fiscal year will be accurate.

Okay, so from June forward of this particular year, all those buckets are going to be accurate?

Starting early July.

July, okay.

The buckets are going to be good.

Okay, great, thanks.

Yeah, Mike's done a really good job with that, working with Goff now and getting it. I still personally, because of the cost of barter, because of the lack of reporting, you've got a really talented PGA Pro here in terms of his ability to do demand pricing and revenue management and his ability to sell two times beyond 90 days or to sell... you know, reservation fees as other municipalities are doing, unleashing him by having him having the right information that's available in other point of sale systems, I think you'd see him flourish and I think you'd see the golf course flourish with a different point of sale system rather than barter. Barter is used in the major metropolitan areas where there are many people on the same system. So if I'm in Denver, Colorado, They have 20 different clients, and if I'm looking to play somewhere, I just go in and find the time that best meets me. It's course independent. I'm more looking for time than course. Here, there's no viable options. It's here at Valley Vista, which came in dead last in the survey. So you've got a captured market here. That's why I don't think barter works as a model. So we've got that, the rate card, the range partnership, and commit to the capital sequence. So the decision to be made by city council, zero to 30 days, is to, I think, tell Tim, tell Mike, what's their financial goal? What do you want to see them achieve? Negative cash flow, is it acceptable? If so, how much? Neutral cash flow. And if you say neutral cash flow, they're going to ask you for rate changes. They're going to ask for changes in policies and procedures. Are you looking for them to generate positive cash flow with capital excluded? Or are you gonna say to them, as some municipalities do, as Alamo City Trail does, you gotta fund everything out of the golf course operation. We're not bonding for anything. With the revival of golf, renovations are now occurring across the country being funded out of cash flow. If we adopt a rate card, we talked about the impact of 157 possible, 83,000 if you lose 10% of your rounds, and you break even at 21% of your rounds. The range partnership. The city revenue on the range is 65,000. You're guaranteed 65,000 in range revenue. They're gonna invest $600,000, and you will split 50-50 the range revenue over $65,000 for the first five years, and at the end of the five years, you can buy out the lease. Yes, Sean?

That's for the top range?

Yeah, top range.

How many different companies provide this type of service?

Cover the Tees is the leader in the golf industry. You could on your own, Jamie... Go construct the shelter yourself. Don Ray, president of the PGA, spent $450,000 building it at Augusta Ranch. You could fund this yourself. You could take the incremental revenue and not split it 50-50 for five years. And you would license the software for $47,000 from Top Tracer.

But are there other companies other than Top Tracer that provide something similar? There's only Top Tracer.

Top Tracer is the number one being installed across the country for this range technology. Cover the Tees is unique in that what they're doing is that they're using the Top Tracer along with they're building the building for you and they're funding the building rather than having you fund it. There are all kinds of Simulators, there's three or four if you go to Golf Galaxy PGA Superstore. There are other simulator stores out there. But in terms of creating it on the range with the coverage, you know, and the satellite systems that are used, top tracers bar far and away. It's a subsidiary of Topgolf. You actually see it on the PGA Tour, their technology being used. The fourth decision to make is engage the architect or create a master plan for the golf course going forward, putting an irrigation bid out. Irrigation systems prior to the pandemic were $1.2 million. It is absolutely stunning the cost of what's happened to irrigation systems in the golf course industry. Pat, you'd confirm that, wouldn't you? It's unbelievable how the cost, and so by not doing it, you're actually ending up paying $6 million more. The holding pond engineered and built, the pipe controls, the surfaces, and the equipment reserve. So what to do now? What's your critical path? What are your takeaways from this study? Restore the posted rack rates and index them manually. Tighten the discount structure. Who qualifies, when, and how deep is the discount? Extend your booking window to 90 days with dynamic pricing, charging a premium for advanced access. Require credit cards to be used. No-shows are a problem across the golf industry. The average golf course loses 142,000 in reservations being made and people not showing. That's a national statistic. We don't have the statistic here because of the point of sale system as to the amount of no-shows. I'm using a national statistic to apply it here on a local situation.

Do we have a policy for no-shows? Do we charge?

We do not do we track the no-shows Okay, I Would think that would be important based off of that statistic So golf courses are now are requiring credit cards to make a reservation even of season pass holders if you're want to play at the common ground golf course the Colorado Golf Association not only do you put up your credit card you prepay for your green fee in advance and You can cancel it up to 24 hours in advance. But the whole concept, if you rent from Hertz, has anybody rented from Hertz lately? Most of their rates are now requiring payment in advance on Hertz. It's interesting in terms of the dynamics. When I was running cars coming down here, I had to scroll down to the bottom of the page to one that gave me some flexibility in terms of flights and stuff. The first 30 options were all prepayment. Implement the weekly new, build the database, Jamie. And then once we have the database, we can do a weekly email newsletter that starts contacting the customers. We can then start doing the Facebook, the TikTok, and the other social media influencers. But we first need to know who is the customer base, and that's what Mike's currently working on. The capital shortfall is $11 million and green fees are not going to cover this in any short period of time. So let's dream for a minute. Your operational loss is a half a million dollars. If you implement the rate increases, you'd be up $150,000. I estimate your range revenue would go to $250,000 and your share of it would be another $100,000. If you implement credit cards and no-show, those times will be sold because the demand exceeds the supply three to one. You'd pick up, I think, $100,000 in revenue. If you open the window and did dynamic pricing beyond seven days, yes, you're going to push your residents and seniors and veterans to later in the day, but there are those that are willing to pay the premium to play early on Saturdays and Sundays. And if you change the point of sale software to a system, you'll save $30,000 in licensing cost. So your deficit's now down to $170,000. And if you were to invest in the irrigation system, you'd save $200,000 in terms of the anticipated reserves annually. You could actually be operating at a surplus of $30,000. So the conclusion is the course is delightful. It's well loved. But its infrastructure has reached the end of its useful life. And so it's up to council to determine what do you want to do, what deficit's appropriate, what rates do you want to implement, what changes in policy do you want to make. What questions can I answer for you? I'm going to go down because I want everybody, while you listened intently, I want to make sure that I visit with each one of you one-on-one and get the questions you may have. Sean, I'm going to start with you. Yes.

Not so much about your report, but we have to factor in quality of life. Everybody talks that no matter where you live. And it is a quality of life that we need to retain. One thing that wasn't mentioned is the city actually assisting with golf tournaments that directly supports community events, community fundraisers, and it's a viable asset for that. My concern, it's not really a big one, The city, I don't think, really gets enough thanks for everything they have invested into it and what they do for the local charities, et cetera, et cetera. I don't know if... I see the courses of an entire operation. It's not just the golf. It's the range. It's the food. And when you have a golf tournament with 80 to 120 people, they're utilizing every facet of the golf course for that day to give back to the community. That's huge, and I'm part of that as well. So I don't know if the top range should be included in the tournaments itself, but the 90 days, I totally agree with that. I agree with the new POS. I think you're getting just about as close as you can to where I was looking for. And you also mentioned that a private entity itself, not just a management company, it's not feasible at all. And I think the city should take pride in keeping that. And you have structured very well, mind you, a direction towards that. It just kind of reminds me with the irrigation comparable to what the city's going through with our water leaks, not just the golf course leaks. And that's gonna be something we're gonna have to hit those crossroads sooner than later as well. So I see how it all ties in together. I'm for your plan. I will say that. And it's basically a two year before for the capital improvements for the irrigation. A lot has happened in the city just in the last couple of years to citywide, and I anticipate that's not going to stop. So revenue on other ends may help. Offset as well. But I think you did a fabulous job. I did meet with Mike today because I wanted his input and how he felt about it. And I totally understood where he's coming from. I actually understood where you were coming from when we did meet. I knew it wasn't realistic, but you got as close as I could hope. So thank you.

My role was to show and outline how you could become profitable. It's not my decision. It's the decision of council to determine the tournaments that you just made. It's a recreational asset in the city. All of the charity events. To what extent do you want to fund it is the question that needs to be provided by council to leadership that they can then set the rates with recommendations to come back to you based on what your value system is Role was to say here is the options for you to consider we understand that but thank you Jamie You have some you sure Mr.. Dykens

We're using four of 15 reports. Where's the benefit in using the other 11? Is there a lot of cost to using the other 11? And will it benefit the city and the tracking and everything else if we were to use them?

The answer is yes. One report would show you for the entire year by hour by day the utilization and the revenue within each one of those hour segments for the entire year. It would help you set the right pricing structure. Two, the reports within this existing system are very rudimentary in terms of I can't tell easily how much you spent versus Keith spent versus Sean spent. I should be able to go in and run a query report and say, give me the top 50 customers by what they spent by day, by time. I'll give you an example. I was in Abu Dhabi, and there was one person that had spent $45,000. He had only been there five times. The general manager didn't even know who he was. He saw that he was spending $9,000 per visit. Now, imagine we're in the Middle East here. He said, send them a dozen balls, some shirts. I didn't realize how good a customer he was. So the whole essence of marketing is we really don't know who our best customers are. Who is the one that is paying us $5 per round and using the prime time tee times as differentiated from the golfer that's paying us $60 a round and can't get access to the golf course? At any business, United Airlines, Marriott, all these loyalty programs are based on what? What's the customer spending and how much are they spending and what's their visit? The data is really rudimentary within the system. There wasn't even a report that I could tell you the rounds by day within the hour of the day.

So when you're talking the proper software, That is include, that's what you're actually talking about is the reports and all.

So that Mike has the information in terms of who's his best customers, what is he yielding per hour, what rate adjustments can he make suggestions to city council, so he has the empirical data very easily. And I'm a little biased here, let me give you my background. In 1989 I formed a software company called Fairway Systems. We serve 450 municipalities. I wrote the query reports, Oracle query, in which a pro could literally go in and just let it go click, click, and get those total 17 reports. Fifteen of them are essential to be able to run the golf course. When I sold the company, two of the software firms in the country, Golf Profit, they licensed the reports and put them into their software because they're the essence of what you need to run a course well. Club Profit, 4UP, 10-4, Linksource, anything that's got a query tool bedded within it. Club Profit uses Microsoft BI, business intelligence, to generate reports. The information that would be available to Mike in terms of who's coming, what's coming, and revenue per hour would be stunning compared to where you're at now.

The top tracer, that's for the The range, that's the covered area, getting people that are sitting there watching out of the sun. Did you say that that was no cost to the city, that the developer puts it up, but then he gets a certain percentage? Is that how that is?

The contract is as follows. The estimated construction cost for 18 bays, which was measured for your range, is about $650,000. The city does not make that investment. They will build it. They will install it. The city's only cost is $47,000 for the licensing fee for Top Tracer. Your alternative that Jamie brought up very astutely is you could go build it yourself internally and license the Top Tracer for $47,000. if you're not wanting to spend that $400,000, $500,000 to build it, or let's say you were to makeshift it at $300,000 because of lack of capital, they're willing to do it. You share the revenue for the first five years and then you buy out the lease at the end of the fifth year for the construction cost. The ideal situation, Jim?

Pardon me?

The ideal?

Yeah.

Write the check. Our advice would be write the check, but our advice would be absolutely do top tracer because it opens it up as a recreational amenity because a person that doesn't play golf can stand on a range with a club and hit a ball and say it went 50 yards. A junior player that's looking to get a little kid can do this. So you open it up to a whole new segment of a population as a recreational amenity. The family that would come out and the father and the mother and the two kids and they could go play and hit balls and see how far. There's all kinds of games in them in terms of top, hit it so far, hit the fish, that kind of thing. You put a food truck there, it becomes another entertainment activity for people to do in the city at nighttime. It's the number one What are the top three things happening in the country? Credit cards to book a tee time, booking beyond seven days, and installation of top tracer.

And I really agree and like the concept of the credit card reservations and charging for no show. I think that's a huge benefit. If I were to go golf tomorrow at 7 o'clock in the morning, am I going to pay the same amount if I were to go at 2 in the afternoon right now?

No.

No. So we already do a premium hour charge, so premium fee for earlier hours we've already implemented.

You have a fee from the start of the morning until 2 p.m. The rate changes at 2 p.m. So what Jim is talking about is that booking in advance, not only do you have the booking fee, you now pay the rate in addition to the booking fee. The dynamic pricing JJ is talking about is just like the closer you get to needing the flight, the price goes up. Correct? The closer you need to getting the hotel room, the price goes up. Dynamic pricing is built on the closer you get to needing it, the higher the price goes. This would be the further out you want to book it to secure your tee time. So like guys who are planning a golf trip, correct? The price goes up in advance. The price goes up in advance. So you want to go, you and 19 friends are planning a trip and you know that you can get your tee times five months in advance.

you're not caring about paying the extra $10, $15 because you're guaranteed tee times.

That's where the dynamic pricing comes in, booking that far in advance. So now you're paying, you and your team, you and your players are paying $85 to play while everyone else is paying $70, but you have your tee times booked way in advance, and you don't have to worry about it. You don't have to worry about anything. If you call me two weeks ahead of time trying to get 20 players on a Saturday, You're not getting it, right? I mean, so this is where the pre-booking or booking that far in advance is to your benefit and to our benefit.

Got it.

Okay. Did that help? Yes. Okay.

Since you're right there and you're talking about this, it was mentioned that you would be the one to decide what that pricing would be. Is that correct?

I'm not the one to decide. I would have my input in it. I think city council decides. I would have my input and say, here's what we believe will work, but I don't make the decision.

So dynamic pricing is a set amount by time. It isn't something that you would go in on a week-by-week basis or a day-by-day basis and say, this day is a holiday, so there'll be more people. It would just be by time. It wouldn't be that complex in how you did that.

Correct. Because dynamic pricing, I worked at a golf course in San Diego that had dynamic pricing. And the closer you go... The closer you got to the day, the higher the price. Sure.

And I understand that. But I just, you know, it's more complex in the way that other industries that were mentioned, how they handle dynamic pricing. And when he said that you'd be the one deciding that, I thought it was going to be a little bit more in-depth where you would be spending a lot of your time figuring out this pricing.

Well, I would be. But the golf operation systems right now, Golf Now, any of those, like JJ just talked about, any of those have a dynamic pricing option. They all do.

So it decides what the price is.

We can let it decide or we can decide. You know what I mean? Yeah. Thank you for clarifying. Okay. Anything else? Yes.

I have a couple things. We don't have currently, or do we, have prime time fee. And for annual pass holders, we don't have prime time. Is that something? I didn't see that in here. I don't know what's industry standard, but would you agree that those are attractive time? I mean, there's a certain time of day when golfers like to golf.

Yes. And we are an early morning golf course. Yeah.

Yeah. Okay. I just wondered what industry standard, how they look at prime time pricing. Because I'm hearing feedback that annual pass holders are taking up a lot of the prime time spots. And it's not that I want to detour the annual pass holders, but I also want to make sure that we have available tee times for non-annual pass holders.

Agreed. But when it comes to prime time pricing,

There's two ways you look at it.

It's a day-to-day thing or it's like what's being done in Vegas and Bullhead where they have their season, right?

I was thinking more seasonal.

Well, the difference is, The seasonal is when it's really, really hot, Vegas hot, Phoenix hot, Bullhead City hot. We're hot, but we're not that hot.

And that's where I was going because with my comment to you, JJ, it was like when they get too hot, they start coming to our golf course.

And in a month, when they start shutting down to overseed, when they close for four to six weeks, they're coming to play our golf course. Sure. Same thing with people in Vegas. Same thing with people in Phoenix. Same thing with people in Scottsdale.

Right. I just want to capitalize on that opportunity.

Understood. Yep.

Okay. Thank you.

We covered, chairs, in the report season passes and the value of them. They're massively undervalued at $1,250 for unlimited play for a single, $2,250. In, I think it's Chapter 7, we literally showed what that calculation is, and it's almost 33% higher season pass holders should play. And that's a calculation, presuming, of the playable days. They play about 25% of the days. so the rates on the season passes. Now, if you wanted to maintain those same rates, what the option would be is to restrict them to time of day, which some municipalities do, saying season passes are valid after 10 a.m. Okay, thank you. Smiley, I appreciate you reading the entire report.

I actually read it a couple times. Very thorough report. I understand what you're saying. The problem that we have right now, even the deferred maintenance, we're getting hammered by the people that don't play golf for spending so much money on the golf course. And if we spend millions more to get the golf course back in shape, is that the best use of city assets? and I'm not a golfer, I'll say that up front, and I know that people enjoy golf, but how much should we subsidize one out of 10 of our citizens?

That's a value judgment that each city council person has to make unto themselves. Our role is merely to present to you the financial data so that you can make an informed decision.

You did a good job, thank you.

Keith. And hopefully we outlined them in terms of the priority, in terms of, I think Tim and the staff would be really appreciative of you saying the financial target for FY27 is this deficit. and so therefore they could come back to you with a plan. One of the things that I did not mention that was in the report and was in the bullet points is that we did recommend the abolishment of the Golf Advisory Commission. That if you watch the TV program that I did, it is, the role of volunteers is to listen, not to direct, not to demand, and that the presentations that are published On TV don't represent the city very well I think and so I think this golfers really need to hear what's going on in the golf course and so a quarterly or semi-annual presentation where Mike and Mike and Pat come in and for all golfers are interested saying here's what we're doing. Here's what we're working on because one I thought that the functioning of the Commission wasn't was very confrontational and those that I talked to on the commission felt that they weren't being listened to. And so they said, what's the point?

And to that point, I disagree with you wholeheartedly on that. And the reason for that is if the history, they were prior to the Gulf Commission, the Gulf staff and Mike Mearsman were disseminating information out to the public. Those meetings were very confrontational. So if you think the commission meetings were confrontational, you should have come to one of those. I feel like there's great representation. I feel like the structure needs to be manipulated a little bit to where we give them more autonomy to speak up. They're representative of several golfers and pockets of golfers within the community. It felt like it was the city against the golfers or the golfers felt like it was the city against the golfers and they weren't being heard. That's how the golf course commission got born. So I wholeheartedly disagree with this banning the golf commission. I think they can be effective. I think they just there's some some some stuff that needs to happen for them to be effective. And I think they would appreciate their voices being heard and making decisions and working with, you know, staff on on projects and things. I feel like it could be a very active golf commission.

So I respect your opinion. I fundamentally disagree. The commission's a total waste of time. Tim, do you have any final thoughts?

Tim, excuse me, because I would like to just direct my comments to you. I feel like this is a great report. There's a lot of good data in here. However, I personally feel like this is a complete bait and switch. because for years cherish and i and the rest of the council but specifically the two of us we were very clear we wanted a marketing plan that would reach out to non golfers travelers we were trying to bring in new golfers and now in that two years we finally came to this and not that this isn't helpful but this isn't a marketing plan and a newsletter is great and i think it should be added but that isn't what we were after in that marketing plan that we still do not have. And what we do have is a report that says, you need to spend over $11 million on the golf course. And we don't have $11 million for the golf course. And not only that, but we had a community survey for the rec center. And the golf course was added in at the last minute. How did people feel about spending $11 million on the golf course? They were adamantly opposed to it. It was overwhelming. The community doesn't want to spend this kind of money on the golf course. And we also shut down the rec center based on that survey. So I don't know how we can justify going back and saying, well, we know you don't want this, but we're going to go and spend $11 million, and we're not doing that rec center either that a lot of people were after. So my position is that there are some good ideas in here that would increase revenue, and I think we should look at those. What's going to have to happen is I think that we need to make this an enterprise fund. We need to increase revenues. And then once you see that increase, maybe there's a possibility of getting a bond that is paid for solely on the revenue of the golf course. I still believe that it would be worthwhile to put out an RFP to see if there's an outside firm that's willing to lease the golf course, not just manage it, because we don't want to continue with the expense of it. But that's just my opinion. so ultimately you know looking at things that would increase revenue but will not um decrease the number of golfers because i agree with the vice mayor i don't really think that a hundred thousand dollars is the average revenue of the golfers um i think it's really easy to take a survey and click yeah i make 200 000 a year and they're on Social Security or whatever. It's just not, and we have that data. We know what the average income is in Kingman. Again, focusing on increasing those revenues, finding other ways to support those repairs that are needed. And I still want to see a real marketing plan from Mr. Mearsman or from the golfing staff exactly how we are going to reach out to Travelers non golfers try to get people in the grill that haven't ever been there and what is what is the needed investment? for that type of marketing

So I would also like to, what I thought is, I thought this was a bunch of information, all very useful information. So what I would like to do with this information is I would like staff, I would like golf course staff, I would like Mr. Mearsman, I would like in the month of October, one of our meetings, maybe in the first one in November, give you some extra time. I want to know what staff can achieve. I want to know based off of all this information and the summary, I want to know what's attainable and I want to know like what measurable benchmarks we can reasonably request in the next 12 to 24 months. I want to know, you know, like we did a recruitment plan for the police officers. I want to hear from golf course staff. I want to know What can what can be done? What what was great information? What do you support out of this report and you tell us from the boots on the ground? Put a presentation together so we can make an informed decision at a more lower level this to me I think was very high level and I appreciate the information I want to see on the on the lower level like what what will we can do at a local level because I agree I mean I didn't see much of a marketing plan like I was hoping for. I think what, I don't know what the scope was given, but I just, you know, like I want some action items of some different things and I just didn't feel like.

The RFP was one paragraph on marketing out of 32 pages.

Well, and shame on us, because I thought we were pretty clear. I thought the directive was, how are we going to make the golf course money? How are we going to at least get it to revenue neutral? That has always been the minimum benchmark that we want to get to. So if the RFP wasn't clear enough in that direction, then shame on us.

Well, Sheriff, let's talk about that, because what you have is a plan that will generate the revenue. You've got the existing demand within the city. you know capturing the customer names on which a email database and marketing can be occurred what are you thinking of doing putting a billboards on the highway that's not good now that's not it not so i don't know about what would you need to have a very marketing we have a we have very engaging conversation and i'm disappointed that not even some of it made it into the report

But I'm looking at golf packages. I'm looking at, yes, I want to advertise. I think the component on being able to book out, I think that's fantastic. I think the dynamic pricing is fantastic. But I want to see what are the attractors to our community. How are we going to get people to come play? How are we going to entice them to come play? How are we going to get the word out even more so and keep in front of those people that have golfed our course? and that no, we have quite the gem. So no, sir, I don't believe in billboards on the interstates. I'm a little more high level in marketing than that.

Madam Vice Mayor, if I may. I believe as we approach this, as we got into it, and looking at a marketing plan, and as we explored this with Mr. Keegan, It became apparent that we do have quite a bit of people golfing. It's not so much a lack of people golfing. We have our mornings, our book throughout. As we go through tournaments, I think through November, we don't have a Saturday available, just having tournaments booked out through Saturday. Part of what we were able to find through this practice was it's not so much a matter of people not coming and needing to fill more spots. It's more, you know, where are we losing that money? Where are we, you know, with the season passes and being able to fill all of our prime spots with discounted rates and those season passes. we're losing a lot of money in those areas. So that's where I think really we found a lot of benefit in what Mr. Keegan did was looking for those places where we're losing because we did start off with marketing. That was the idea is how do we market this course more? How do we get more people on it? What we were able to find as we got in there is we have a lot of people coming. It's just a matter of not realizing all of those rates. Is my microphone not working? Thank you. not being able to realize all of those rates because of those various things that we've got leakage.

And that's why, based off of this information, I think that staff can put together something that can be presented to council. And I think that would be something that I'm hopeful that council would enjoy hearing from staff.

Absolutely.

All right, thank you. All right, any other questions for Mr. Keegan?

Thank you.

All right, thank you. All right. We don't have a call to the public, so we are adjourned.