This Page About City told to Treat Golf as a Business |
City told to Treat Golf as a BusinessA national consultant said Tuesday night that Great Falls doesn't need to get out of the golf business. But Richard Singer of the National Golf Foundation, Inc., said the city needs to start treating golf as a business. Singer didn't support the closing of the 18-hole Eagle Falls or Anaconda Hills courses, and predicted there would be few buyers if the city wanted to sell the properties. The courses lost about $200,000 the past fiscal year, mainly because of high debt payments caused by a $2.6 million remodeling project at Eagle Falls about five years ago. Singer urged the city to explore setting up a separate "golf enterprise fund" that would operate independently of other government departments. "Separating golf operations from other city departments seems to work well for some municipalities," Singer told city commissioners and about 80 golf fans who packed the Gibson Room at the Civic Center. "Park and Recreation departments are structured toward public accommodations, and that's not the model that works best for golf courses. You need to get out of the public accommodations mode and into the entrepreneurial mode." He said forming a separate golf-enterprise fund would allow municipalities to have "more flexibility with regards to personnel." This flexibility can enable employees under the "fund" to have a different compensation package than other city employees, he said. In a 150-page report, Singer also recommended that the city hire a golf director with supervisory responsibilities over both courses. He emphasized the director "would not have to be a PGA golf professional" and should have an incentive-based compensation package. The consultant said the biggest problem facing managers was reducing labor costs at the two courses. Great Falls is one of the few cities in Montana that uses union workers on its courses. "Unions are generally not compatible with golf operations," Singer said. "Golf courses are not a 9-to-5 job. Grass grows 24 hours a day, and golfers play heavily on weekends when (union) labor tends not to work." Singer noted Great Falls was the "smallest city in the country operating two municipal golf courses," and said the "labor (cost) ratio is as high as any I've seen." Singer emphasized that reducing operating costs is probably easier to do in this market because there is no great potential for revenue growth. He said the Great Falls market has "average to below-average numbers of golfers," and said an aging population with relatively low incomes contributes to "modest demand" for golf. His report also said competition from the 18-hole Emerald Greens executive course and the 9-hole Gannon Ranch course was a factor in reduced play at the municipal courses. His report recommends slightly higher greens fees and motorized cart fees next year, along with an expansion of the season. He also wants greater flexibility for managers to adjust fees in periods of low play. "The fee recommendations are minor changes, two or three dollars per round ... There's no magic bullet, no one thing you can do to make all your problems go away," Singer said. The report summarized six or seven options available to the city to improve the profitability of the courses, including leasing the properties to private businesses or individuals. Singer said he favored making structural adjustments. "I do admit I'm leaning toward making it work within the current system," he said. "The losses (here) are not that severe," he added, saying a California course he recently examined was losing $500,000 a year. Singer didn't give the city advice on how to make its huge debt payments go away. The city borrowed money to build the back nine at Anaconda Hills almost 15 years ago, and that debt skyrocketed after the Eagle Falls renovation project. Total debt payments were $238,461 in the past fiscal year. "The debt service is a major contribution to this situation," he told local golf advocate Larry Theissen in response to a question. "The money has got to come from somewhere. You have to ask your commissioners, but it's probably not an option to pay off that note." Continue to learn more about golf, please visit Great Falls Tribune.
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