Cities Weigh Financial Options for Municipal Golf Facilities

By | October 12th, 2017

Bradford Creek Public Golf Course in Greenville, N.C., and Dodge Riverside Golf Club in Council Bluffs, Iowa could each be managed by third-party firms as part of efforts to increase revenue. In Lexington, Ky., discount rates are being altered or eliminated altogether at the city’s five municipal golf courses, while Bethlehem, Pa., city council is considering how to turn around the cash-strapped Bethlehem Golf Club.

Greenville, N.C., officials are expected to recommend that the City Council approve a contract with private company to manage Bradford Creek Public Golf Course, moving away from an option to hire a firm to improve marketing to the course, Greenville-based Reflector reported.

The agreement with Billy Casper Golf would still result in expenses for the city, according to an abstract of a presentation. The city has negotiated a not-to-exceed clause in the proposed contract that would cap any net annual loss for the duration of the five-year contract, the Reflector reported.

Specifics are to be presented tonight along with an estimate of the effectiveness of hiring a marketing firm. But staff will recommend going with private management, according to the agenda documents.

The city purchased Bradford Creek for use as a public golf course soon after flooding from Hurricane Floyd in 1999. The failure of revenues to meet expenses at the course has been a regular concern for some city leaders and residents since then. Others believe the city should subsidize course like it does others Recreation and Parks programs and facilities, the Reflector reported.

District 5 Councilman P.J. Connelly offered a motion during the October 17 council meeting directing city staff to investigate whether outside management could operate the course more efficiently. The motion was approved unanimously. Staff put out a request for proposals to management companies. Three companies bid on the job, and council selected Billy Casper Golf for further negotiations on June 5, the Reflector reported.

After a closed session meeting in August where council was briefed on negotiations with Billy Casper, Connelly asked that discussion on hiring a marketing firm instead of Billy Casper be added to the September 14 meeting’s agenda. At that meeting, council discussed the benefits of both options, but members ultimately felt they did not have enough information. The discussion was tabled until staff could conduct a more thorough investigations of both options, the Reflector reported.

After years of losing money, Council Bluffs, Iowa Mayor Matt Walsh is proposing city council hire a third party firm to manage the Dodge Riverside Golf Club, Council Bluffs-based WOWT NBC 6 reported.

More than 60,000 yards of quality golfing green has made the course a golf favorite among many, but for years, it has been struggling to make any money, WOWT reported.

“I can understand it losing money. I can’t understand very many courses that would make money that charge these kind of prices. I mean, [it’s] $25 during the week for seniors,” golfer Bob Smith said.

Walsh couldn’t tell WOWT how long exactly the club hasn’t been able to make money, but he knows it at least goes back as far as 2014. At one point, the club was $300,000 in the red, which at that point, WOWT reported.

“Frankly, they didn’t cut the costs last year, but it was still close to $200,000 last year. The model that’s down there really doesn’t work well for the taxpayer,” Walsh said.

Because the club’s food vendor contract expires at the end of the year and two golf professionals plan on retiring within the next year, Walsh said looking at other options just made sense, WOWT reported.

“We just need the expertise to get the tee times sold, to get the course managed in an efficient manner, and to do it at the same quality that’s being done today,” Walsh said. “We have great employees that work done there that they do a great job of maintenance on the golf course, in managing the clubhouse, but why not investigate the possibility of somebody that could do it all in one package?”

There are three main reasons why the club is struggling, according to Walsh. One, the restaurant doesn’t turn the type of revenue it can and doesn’t cater 100% to golfers looking for a quick snack. Two, there are less people coming in to golf, and lastly, the city is paying too much money in wages, WOWT reported.

“In some cases, our employees are making double what the industry standard is,” Walsh said.

All the employees of the golf club are paid by the city, but hiring a firm doesn’t mean current employees will lose their jobs. They could apply with the firm, should the measure pass, and it’s likely the firm would welcome them with open arms. “We have management maintenance, the superintendent, we have a plan for him to stay in the city in a different capacity,” Walsh said.

The plan is still up for city council approval, but if it fails, the burden of the struggling golf course falls back onto tax dollars. “Any loss at the golf course comes right out of the taxpayers pocket whether or not they golf or not,” Walsh said.

If the measure is passed, the new firm should be operating the club by January 1, 2018, WOWT reported.

Golfing at the five public courses in Lexington, Ky., will get more expensive in January as the city tries to stem $1 million in annual losses in its golf program, the Lexington Herald-Leader reported.

The city will raise the eligibility age for a senior citizens discount from 50 to 57, eliminate some other discount rates altogether and bump up the price for an annual pass to driving ranges, the Herald-Leader reported.

If the changes don’t produce enough savings for the program, which has been mired in personnel and financial problems, the city may have to look at closing or re-purposing one of its courses or handing over golf operations to a private management team, said Monica Conrad, director of Parks and Recreation.

The current senior citizen age of 50 is the lowest for any local golf course. “Last year, 26 percent of our rounds were senior discounts,” Conrad said.

The city also will eliminate the use of loyalty cards—which can be purchased for $100 a year—on top of other discounts, Conrad said. In addition, there will be no special dusk rate beginning January 1. Twilight rates—which apply three to four hours before sunset—will be eliminated at Meadowbrook. There has been no specific time frame for a dusk rate, Conrad said, creating confusion about when the steep discount should be applied, the Herald-Leader reported.

An annual pass for unlimited driving range use will increase from $150 to $200, Conrad said. Golf cart fees were increased $1 per 9 holes and $2 per 18 holes at each course in August. The golf cart fee increase is projected to generate an additional $109,000 a year, and it’s not clear how much savings the other changes will produce, the Herald-Leader reported.

The changes are in response to a consultant’s report that recommended the city tighten financial controls, increase prices, nix some discounts and make other changes to cut losses.  Consultant J.J. Keegan told the council in July that Lexington’s public courses lost $4.5 million from 2012 to 2016, the Herald-Leader reported.

All of the courses—Tates Creek, Meadowbrook, Gay Brewer Jr. at Picadome, Kearney Hill and Lakeside—operate at a loss, meaning tax dollars subsidize each course. Over the past four years, the city has implemented cost-saving measures that cut annual losses from $969,719 in 2012 to $853,527 in 2016, the Herald-Leader reported.

In 2017, because of an increase in retirements, losses climbed to just past $1 million, Conrad said.

Keegan recommended several changes, including increasing green fees, decreasing pro golf shop hours and increasing maintenance staff hours. He also suggested halting the use of multiple discounts, which allowed some people to pay as little as $2 per round when the cost to the city is $36, the Herald-Leader reported.

No council member opposed the changes, the Herald-Leader reported.

In Bethlehem, Pa., City Council on October 10 considered ways to get the finances of the cash-strapped Bethlehem (Pa.) Golf Club back on course, the Allentown, Pa., Morning Call reported.

In a packed 2 1/2-hour committee meeting, Councilman Eric Evans raised the possibility of leasing the course to a private operator who might have the business acumen to make enough profit to perform needed repairs on the 61-year-old course. The suggestion elicited mixed reaction among his colleagues on council and the crowd of about 100. Golfers had more suggestions to increase the course’s profitability, the Morning Call reported.

Some suggested speeding up the pace of play to get more people on the course and better managing the driving range. Some suggested increasing prices or adding a fee to season pass holders to fund maintenance projects; others suggested marketing better deals to coupon books for golfers, the Morning Call reported.

Bruce Gardiner, a Bethlehem resident and golfer, suggested the city consider less expensive ways to fix the course such as turning the sand traps into grass bunkers. The course could also draw in more money by offering twilight golf. He suggested it might attract younger golfers who would want to play nine holes after 5 p.m. and then get a beer and a bite to eat at the course’s restaurant, the Morning Call reported.

Evans, the committee chairman, said he appreciated the feedback, and it would provide a good context as the city begins deliberating over the coming months on next year’s budget, though any changes to the golf course would likely not take place for a couple years as the city develops a long-range plan, the Morning Call reported.

Leasing it would require the administration to call for proposals from operators. Council would also have to approve. It would be a lengthy process that city officials say likely would not take place in time for the 2018 season, the Morning Call reported.

Like other public golf courses, Bethlehem’s hasn’t been making ends meet. The enterprise lost $122,000 last year, its eighth deficit in a row, according to statistics compiled by the city clerk’s office. The last time it made a profit was $5,123 in 2008, the Morning Call reported.

City officials say the course comes close to making its direct expenses but sometimes can’t pay all of its $150,000 bill to the city’s general fund for its overhead costs. That leaves little or no money left to put toward hundreds of thousands of dollars of investment in the coming years to repair cart paths, sand traps and the irrigation system, the Morning Call reported.

Bethlehem Golf Club operates a nine-hole executive course and the 18-hole Monocacy course, a par 71. The Monocacy course pricing depends on day of the week, time of day, residency of the golfer and whether the golfer is riding a cart or walking. Residential green fees can range from $24 on a weekday to $45 for a golfer riding a cart on a weekend morning, the Morning Call reported.

Bethlehem Golf Club Superintendent Tom Wilchak said the course remains a popular spot for golfers with the number of rounds played each year reaching the upper 30,000s. The city has tried to tighten its budget, reducing its golf staff from 12 in 2010 to eight today. It’s also had periodic rate increases, the Morning Call reported.

Solutions other than the leasing option could include an operating authority that could also assume control of the city’s other recreational offerings such as the pools and ice rink, Evans said. The city also could decide whether it makes sense to close the nine-hole course to curb expenses, but that would also cut about $200,000 in revenue, the Morning Call reported.

One Response to Cities Weigh Financial Options for Municipal Golf Facilities

  1. Mike Stewart says:

    The hiring of third party operators is not the answer since there are numerous examples of this being done in the past with negative results. The facts are that too many courses were built back in the 90’s and cities need to stop using tax payer money to keep these loosing money course operating in an already over supplied market. Lexington KY is a prime example of this happening. Based on the articles comments their solutions are only band-aids and the best outcome will result in them loosing a little less money. They should close some of the courses which would force more golfers on to their remaining courses and then they may break even. Having lived in Lexington in the past there are more than enough courses to handle the golfers in the area- why should city government send tax payer money to keep these money loosing course open.

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