City should be out of the golf course business, says Calgary politician
City courses might be in a money-making scenario by 2022, according to administrators
While the city tries to re-invigorate its golf courses, one city councillor thinks the city should get out of the business altogether.
On Wednesday, councillors Joe Magliocca and Sean Chu voted down a report that was presented at the community and protective services committee meeting. The report was an update on the changes being made to course operations to help with poor financial circumstances.
"I truly believe we should be out of the golf course business," said Magliocca. "I know golf courses, they pay $200,000 in property taxes and [municipal courses] pay zero."
Calgary's courses are basic
Magliocca asked the city why it can't be more competitive with the private sector by upping fees.
Greg Steinraths with the city said the municipal golf courses are considered "entry level" and if city courses raised fees as the break-even solution, each round of golf would have to go up by $15.
"A lot of people would take their purchasing power and go to the next course," Steinraths said.
'Drives me nuts'
Magliocca asked Steinraths why the city didn't find contracting out golf course operations feasible. Steinraths responded that it was a labour code issue and labour relations — there is a statutory freeze in place because of ongoing union negotiations.
The Ward 2 councillor responded suggesting the city should "just fire" workers.
"That just drives me nuts," Magliocca said. "That's always the excuse I hear … you know, there's ways to skin a cat."
Although the city doesn't have the capital cash to build clubhouses, councillors Ray Jones and Diane Colley-Urquhart hoped the city could find private sector partners to build facilities. Jones said this would help the courses earn more revenue from events in the winter.
The City of Calgary operates eight golf courses and three driving ranges at six locations. These generate a total of $10 million in "direct economic activity" every year.
Golf courses in the city used to generate their own annual revenues and contributed $3.6 million every year while also self-funding $14 million in capital improvements for the courses that were operating.
But in 2012, council changed the mandate.
Courses and driving ranges became tax-supported and were injected with $430,000 to $964,000 in annual support from the city — that's about four to nine per cent of operational costs.
Now, administration is looking to make the courses break even, and eventually pocket up to $1 million in cost efficiencies, site optimization opportunities and revenues by 2022.
Administration is planning six strategies toward that goal:
- Re-opening the newly-renovated and revitalized McCall Lake 18-hole golf course.
- Adjusting fees in 2019, subject to One Calgary budget deliberations.
- Introducing a new booking process called the Golf IT solution in early in 2020 to help increase attendance and revenue.
- Finalizing debt commitments.
- Standardizing operational practices between golf courses.
- Contracting out a selection of services.
According to administrators, these tweaks will yield $1 million in cost savings by 2022.
Other money saving ideas already in swing
In 2014, a motion endorsed by councillors introduced a demand-based fee structure along with other money-saving moves like contracting out the course mowing. According to a document, these changes already helped courses rake in more dough.
Other options administration will look at in the future include:
- New capital investments.
- Future partnership opportunities with industry leaders to help better utilize municipal golf assets.
The report presented on Wednesday will go before council. Administrators are asked to report back by the second quarter of 2021 to give councillors another update on how all of the tweaks are working.
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