The City Council has started a feasibility study on turning the property over to a private operator. A readership poll in the local newspaper showed a small majority in favor of the idea.
The City Council of Bangor, Maine, has started a study focused on whether leasing Bangor Municipal Golf Course (BMGC) to a private operator is beneficial to the city, reports the Bangor Daily News.
“Is the golf course better off in private hands than municipal hands? We don’t know. That’s why we want to study it,” said Councilor Pat Blanchette in discussing the issue.
She was quick to point out “there has been no commitment on anybody’s part. No decision has been made.”
And there is no private company pushing for such a decision, either.
“We have not been approached by any outside operator,” said Bangor Parks and Recreation Department Director Tracy Willette, a member of the study group.
One possibility, the newspaper said, would be the Hollywood Slots Hotel and Raceway in Bangor, which has been peripherally involved with the golf course as a supporter of the Greater Bangor Open golf tournament, including being the major sponsor in recent years.
But when contacted for comment, the newspaper reported that John Osborne, Vice President and General Manager of Hollywood Slots in Bangor, chuckled and said, “The last place I worked did have a golf course, but we have no plans for Bangor in that area.
“It’s not inconceivable,” Osborne added, “but there is nothing in the works.”
He did add that if one or more members of the study group wanted to approach Hollywood Slots to gauge the company’s interest, he would be fine with that.
“We’re always available to the city council to discuss anything they want to discuss,” Osborne said.
One reason that Hollywood Slots could be considered a possible contender as a lessee is that the city wants to make greater use of the golf course by attendees at functions at the new Civic Center, as well as at Hollywood Slots.
“We’re going to try to market it with activity at the new arena,” said Willette.
Blanchette would like to see a direct connection between the arena, civic center, and hotels and the golf course.
“I’d like to see cart paths put in so they could get a cart [at the arena] and drive up there,” she said. “It would make it easier for people not familiar with the area,” she said.
The question of whether leasing the golf course to a private operator would benefit the city is something that has been pondered, off and on, for the past six years, Blanchette said.
“The only problem was it has always been thrown on at budget time,” she said, “and that’s too late.”
This year, however, the council got ahead of the budget curve, as the Business and Economic Development Committee started the process following its meeting in late September. But a quick decision is needed. “We have to make a decision between now and January,” said Blanchette, pointing out that the city manager has to submit a proposed budget by mid-April.
“There is still a lot of information being gathered,” added Willette.
The topic was introduced as part of the process of the annual review of the golf course, which consists of an 18-hole layout and a nine-hole one.
“We have a lot of discussions [about the golf course] and review it every year,” said Willette. “There is no particular reason pushing us toward [leasing].”
Most reviews center on expenses, green fees, membership rates, golf course projects, equipment purchases, etc. On occasion, leasing out operation of the golf course gets added to the list.
“It’s not an easy process to go through, but we go through it,” Willette said.
Part of the reason it isn’t easy is because there are very few similar operations, especially in Maine.
“Riverside [in Portland] is the only other 27-hole municipal golf course in the state,” said Willette.
The Riverside course is a particularly appropriate example, the newspaper said, because Harris Golf, a Maine golf management company that owns or operates nine golf courses in the state, offered the city Portland a deal to run Riverside twice, but neither offer has been accepted.
Willette said his department understands why an outside vendor is considered.
“We want to be as efficient and as competitive as we can be, to offer the best product,” he said.
With the number and variety of golf courses in the Bangor area, the competitive aspect is always a challenge, he added.
“This particular market is very competitive. Going forward, we’ll have to see how that changes and develops,” said Willette, who pointed to Penobscot Valley Country Club in Orono, Rocky Knoll in Orrington and Hermon Meadow as 18-hole courses that are options for players at BMGC. In addition, there are more than a half-dozen nine-hole courses within 20 miles of Bangor.
“From the feedback we’ve been getting, the course is in good shape and we offer a good product,” said Willette. “As long as we can do that, that’s our ultimate goal.”
Blanchette wants to consider how operation of the golf course would be affected by an outside company.
“If we go with a private [company], that puts upkeep and maintenance in their hands,” she said. Those could be expenses the city would not have to incur, she noted.
Blanchette, who said she was a nongolfer, said she was surprised to discover how much work and equipment, and corresponding expense, was required to run a golf course.
“There’s a lot more that goes into a golf course than I realized,” she said.
Brian Enman, Head Golf Professional at BMGC, said that green fees and membership prices will probably have to rise next year—but that by how much is still up in the air.
“I’m going to recommend they go up, but stay as low as they can,” Enman said. “[Green fees] haven’t been adjusted in three years.”
Current green fees are $30 for 18 holes and $15 for nine holes, with a 10 percent discount for Bangor residents. There also some lower prices based on time of day and for students and veterans.
Season-pass memberships have been priced at $630 for a resident single and $700 for a nonresident; $845/$935 for a couple, $890/$990 for a family, and $540/$600 for a senior couple.
The other factor in pricing is that the golf course is an enterprise fund, which means it must raise enough money each year to cover its expenses. Over the years, a “rainy day” fund has been built up to cover lean years. The fund also covers exceptional equipment purchases or course renovations, such as rebuilding bunkers and adding cart paths.
“We never want to dip into the [city’s] general fund to recover costs,” said Enman.
That has been important in recent years, because the course has shown operating losses, although the city’s Tax Assessor and Deputy Treasurer, David Little, noted that there may not have been actual losses.“[The reported figures] may include repayment of debt or outstanding purchases,” Little explained.
On the books, the golf course showed operating losses for three of the past four fiscal years of about $12,000 in 2008, $109,000 in 2009 and $50,000 in 2010.
But for the 2011 fiscal year, which ended June 30, “It looks like there will be a surplus of about $5,600,” Little said. “But that’s approximate, not final— there are still expenses coming in,” he added.
Revenue, mainly from memberships and green fees, gained strength through a reduction in membership prices for people from outside Bangor—a change that nearly doubled the number of nonresident memberships, from 49 in 2009 to at least 95 in 2010.
Cash received from BMGC rose from $514,000 in 2009 to $658,000 in 2010.
The key for any study of leasing would be trying to determine how private ownership would affect any of these numbers, whether the course would remain as affordable under private operation, and if it would remain in the same, or better, condition.
The city does have a previous example of privatization, said Blanchette.
“We ran the Bangor City Hospital for 20 years, and it only showed a profit once,” she said. But since the hospital went to private operation, she added, “It now makes money—they turn a profit every year.”
If the city council does decide this time to go with an outside operator for the golf course, the next step will be a bid process that will include sending out or asking for requests for proposals, checking the proposals and eventually making a selection.
“It’s going to be a long, tedious process,” said Blanchette.
In reporting on the issue, the Bangor Daily News also published an online readership poll that asked, Should the city of Bangor lease BMGC to a private operator? With a limited sample recorded, 55% of the respondents had answered “Yes.”
Tell Us What You Think!
You must be logged in to post a comment.