RSF Association approves new cost-sharing agreement for golf club restaurant

The Rancho Santa Fe Association board approved a new agreement to share the cost of running the restaurant at the Rancho Santa Fe Golf Club, a community asset for all Covenant members. The board voted that the Association will allocate $500,000 in this year’s budget toward the restaurant’s operational costs.

The cost-sharing amount RSF Association CFO Seth Goldman had recommended this year was a compromised number in the middle: a $350,000 contribution. The board debated at length at its May 11 meeting considering options such as an equal 50/50 split, $500,000 and $600,000. In the 2023-24 budget, the cost to run the restaurant is $1.47 million—an even split would be $737,000.

RSF Golf Club President Vince Renda said this year really should be a 50-50 split or as close to one as possible.

“This is really a fairness and equitable argument at this point,” Renda said, noting Association members don’t pay social dues or have a food and beverage minimum but have the same access to the restaurant facility and club events that golf members do. “I think we should all share in (the cost).”

The board eventually settled on the $500,000 number with the caveat that cost-saving measures continue to be explored and that the Association and golf club staffs work together to develop a better long-term solution that works for everyone.

As part of the decision, the board also agreed to raise assessments to 15 cents per $100 of assessed value to approve the budget—the board will not officially vote on assessment rates until October.

The golf club footed the entire bill for running the restaurant until 2019 when the Association board approved the initial cost-sharing agreement. Per the agreement, the amount of the cost share was based on costs expected to be incurred by the food and beverage operations and revised each year.

For the first year, the Association’s exposure was limited to a fixed amount of $300,000 and they stayed within that fixed amount for the following 2020-21 budget. However, for the next two years’ budgets, the restaurant’s operating loss increased as did the Association’s share. Last year the Association pitched in $800,000.

A joint committee, colloquially called the “3 by 3”, formed in 2018 and was tasked with the potential renovation of the clubhouse and restaurant and the operational aspects of the restaurant. The committee included three members from the Association board and three members from the RSF Golf Club board—the cost-sharing agreement was one of its recommendations.

The committee is no longer functional and has not met since December 2021.

Director Phil Trubey said the reason the board was having the cost-sharing discussion was that in the last two weeks, the golf club and former manager stated they were no longer interested in having the agreement and wanted to cancel it. While they did not want the oversight of the joint committee, they did not want to cancel the funding.

In his comments, Trubey said the board was put in a “tough position” and he didn’t think they should be discussing numbers at the board level—he said the Association and golf club staffs should figure it out and work together to come up with the solution for the board’s review and approval.

“The reason this had to happen was basically a governance issue and that’s one of the things that needs to be fixed,” Trubey said.

During the conversation, the restaurant was referenced several times as “an operational loss”, however, President Don Comstock preferred it to be considered more the cost of running the amenity, a service the Association provides to its members.

“This is a great community asset,” said Director Lorraine Kent. “We should subsidize the restaurant and it’s just how do we subsidize it…It has to be equitable.”

In his comments, outgoing Director Greg Gruzdowich said the board knows that it needs to do something different regarding funding the restaurant: “Even the 50-50 split is not equitable across the board because golfers are paying through their golf dues plus as Association members.” His recommendation was to continue the split as it was last year and work toward a more equitable plan in the future, “so nobody is subsidizing anybody else.”

The Association’s goal for the golf club campus and restaurant is that it is a community gathering spot that is accessible, enjoyable and inviting to all community members.

At the annual meeting that night, the Association’s architect Rodolfo Ocio shared updated renderings of the restaurant and snack bar renovation.

The design concepts include improving the layout by redefining the entrance, creating an open floor plan around a new bar, and embracing the outdoors and expanding the patio. Features include larger chandeliers, a formal dining room, a wine lounge with private wine lockers and a card room.

The snack bar project will involve demolishing the existing building and completely re-imagining it as a new “casual dining annex”. The idea is for the elevated, family-friendly snack bar to include features like a pizza oven and an area for lawn games.

Early estimates for the cost of the upgrades are about $3 million for the snack bar and $5.4 to $6 million for the restaurant. Once the designs are completed, there will be town halls for community feedback and Art Jury review.