Expenses exceed revenue for municipal golf course
By Rochelle Moore
Published in News on April 15, 2017 11:35 PM
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News-Argus/SETH COMBS
Phill Martin tries to make a putt at the Goldsboro municipal golf course Friday. He was part of a group from Virginia that stopped for a round as they made their way to Myrtle Beach.
The Goldsboro Municipal Golf Course was initially envisioned to be a money maker for the city, but it has failed to deliver since the city started managing the facility in 1999.
During the past 18 years, the course has not made enough money to cover expenses, but the losses have decreased in recent years due to reduced staffing and other cost-saving measures.
At least two residents have raised concerns about the profitability of the course, and others say the course is a recreational asset for the city.
City recreational properties are not always designed to be profitable but instead provide opportunities that add to the quality of life for residents, said Scott Barnard, Goldsboro parks and recreation director.
"Municipal golf courses, as a general rule, they don't break even," Barnard said. "Golf courses are a recreational amenity, just like everything else we do in parks and recreation. We exist to provide opportunities for folks to recreate, and some people choose golf."
The city can spend millions of dollars to build a recreational facility, such as the new W.A. Foster Center, but never recover the money it cost to build and maintain the property, Barnard pointed out.
Golf is sometimes viewed differently because the sport requires a certain level of skill and typically draws adults, said Councilman David Ham. Golf course fees are also set at competitive levels to draw members from the area.
"A municipal golf course is for providing recreation for the public, but I don't put that in the same category as a recreation center or a tennis court," Ham said. "It requires more costs to maintain.
"I don't think it needs to make money, but it needs to operate at a minimal loss."
Concerns about the costs to operate and maintain the golf course, on South Slocumb Street, were raised by Ham during the Goldsboro City Council's annual retreat in February.
Consideration is being given to possibly raise membership and green fees and offer a lower cost to city residents.
The proposal has already been pitched to city officials by area residents concerned about the taxpayer expense.
Lawrence Merritt, a Goldsboro resident, took his concerns to city leaders several years ago and continues to press for a more profitable golf course that reduces the taxpayer burden.
"As a taxpayer, I've been concerned about this for three years," Merritt said. "The whole thing is a mess."
Merritt has asked city officials to charge different rates for city and non-city residents and come up with a long-term plan to reduce revenue losses.
Otherwise, he said the city should close, sell or lease the property.
"The city of Goldsboro and the city council has no legal or moral responsibility to supplement the golf course for non-city residents," Merritt said. "The city has a fiduciary responsibility to the taxpayers.
"I don't have anything against the golf course. I would be happy if it will break even, but I don't think it will."
The city has owned the municipal golf course since 1939 and previously leased the property to the Goldsboro Golf Club, Ham said.
In 1999, the city took over operations and renovated the property. Prior to the transition, city leaders were told the course could stand to generate close to $1 million in revenue, based on a consultant study, Barnard said.
Since that time, the property and its operations have failed to make enough revenue to cover expenses, said Scott Stevens, city manager.
"It never has made money," Stevens said. "It collected revenue, but it never covered the cost."
Based on city finance records, the golf course operated at a $312,884 loss during the 2012-13 fiscal year, a $201,789 loss in 2013-14, a $155,900 loss in 2014-15 and a $112,790 loss in 2015-16. The losses have been covered through the city's general fund.
"It is something that has been an expense for the general fund," Stevens said. "We have made choices to close in the gap."
Changes have taken place to reduce losses, including a reduction in full-time staff from 10 employees in 2013 to today's three employees, Stevens said. Two of the golf course employees are also receiving a portion of their salary through the parks and recreation budget, instead of the golf course budget, due to other job responsibilities in the city, Barnard said.
The parks and recreation budget pays half the salary of the golf course superintendent, who maintains all the city's athletic fields, and a quarter of the salary of the assistant superintendent, who also performs other city recreation-related duties, Barnard said.
Merritt is also concerned about the membership base and whether more golf course members are non-city residents.
Based on his own study, which included a Google map search of every member, Merritt said he found that 68 of the golf course's 199 members are city residents. The majority live outside the city limits, he said. Ham also presented the figures to the city council earlier this year.
Merritt believes city taxpayers are covering the cost of the golf course while non-city residents are benefiting and paying the same membership fees.
Barnard, however, estimates that the membership is closer to 60 percent city residents and 40 percent non-city residents.
"A lot of folks look at it as a negative that folks come from outside of our city, whether it's the county or another county and play our course at the published rates," Barnard said. "Those folks are making it possible for us to keep the rates where they're at. If we eliminated or reduced those number of golfers by any significant percentage, well then, our cost recovery is going to be worse, not better."
Stevens said the city council has considered golf course operating costs in previous years but decided to not take any action.
The council is expected to review an increase in membership and green fees during its Monday night work session, at 5 p.m. in the City Hall annex, at 200 N. Center St. The proposed increases also include a percentage discount for city residents, Stevens said.
"I think the council is open to the idea, but we'll see," Stevens said.
Regular and family membership fees are $185 per quarter. Fees are $30 lower per quarter for seniors, active and retired military and adults between the ages of 18 and 26.
"I think the fees should be competitive," Stevens said. "I think our membership fees are low. We can raise them and still be competitive."