What is the Role of Municipal Golf????

[Buck Wolter]

Doug-
Only a Hawkeye would compare a golf course to a library! Last time I looked most Libraries didn't sell books and there's some argument that can be made regarding the greater good with libraries, I don't see how a golf course fits into what a city governemnt should be focusing on. If you don't think taxes, financing, etc. are important I'm guessing you don't work in the private sector.

If golf courses are a good idea for municipalities why not bowling alleys, grocery stores and car dealerships -- what's so important about golf?

Buck

[Kyle Harris]

Bowling Alleys, Car dealerships, et al. are not methods by which we can preserve open space. Municipal golf does allow for a rather positive environmental effect.

[George Pazin]

Kyle -

That's your opinion - I'd guess bowlers and owners of car dealerships would beg to differ.

Buck -

I admire your stance. It's an uphill battle, with this crowd and the world at large.

[Ken Fry]

Kyle,

As a student, you have an altruistic view of muni tracks.  That's fine, not reality in many places, but fine.

You live in an area where they work and there's apparently no competition.

I live in an area where they compete directly with many privatly owned, public courses.  The munis have lost money (in some years huge amounts) each of the last five years.  Who covers those losses?  What happens to the private owners if they lose?  Arguing there's no "competitive advantage" is ridiculous.

Recently, there's been talk of closing one of the two city courses for land development.  That would be fine.  We're oversaturated anyway with courses anyway.  Well, plans would inlcude building a 27 hole muni. facility somewhere else.  We have a school budget $4 M over, the local police and emergency personell are some of the lowest paid in the state, yet we can afford to build a facility for millions of dollars for what amounts to a small percentage of the population?

You talk of green space, fine.  Let the cities worry about parks.  I didn't grow up in an area that had city owned courses.  We had easy access to affordable golf.

Govenments should deal in what their residents need, not what a few want to have subsidized.

[Buck Wolter]

Not sure the Sierra Club agrees aboput how environmentally friendly golf courses are. You want open spaces on public ground? They're called parks, arboretums, nature centers, etc. I like golf and think there are probably a few times it could still make sense for a municipal course but what we're talking about is the government subsidizing a lifestyle and in most cases competing against the private sector.

I had a frend who's driving range went under because the county decided to upgrade their range and he couldn't survive when he lost a portion of his business to this competitor who didn't have to factor the cost of land, taxes, salaries, insurance, etc. into the price of a bucket of balls.

They have a name for this it's called socialism.

[Craig Sweet]

Buck,

I guess you would have to prove to me that taxpayer money is subsidizing the golf course and in that last case the driving range. The muni has to pay their employees, they have to pay for gas for the mowers and the ball pickers, they have to purchase equipment....are you suggesting that all those expenses come straight from the taxpayer and not from fee's?

In my experience local governments are very aware, and sensitive, to any charge that they are unfairly competing with private business. They avoid those areas where they might, and in the case of most muni courses they are set up to not use taxpayer monies.

There are many examples of taxpayer money subsidizing recreation....community recreation centers that contain pools, basketball courts, excersise equipment, and tennis courts....these are far more subsidized by taxpayer money than golf courses.

Unlike parks, arboretums,nature centers, and playing fields, golf courses generate revenue for the city and typically pays its own way.

As for the enviroment, I believe there was a recent study done on Cape Cod to determine if golf courses were the primary source of pesticide run off....turns out home owners contributed far more to the problem than golf courses...it is far easier to control chemical use at a golf course than it is to tell 10,000 homeowners to clean up their act and use pesticides responsibly.

Maybe the Sierra Club (funny how they are everyone's whipping boy when the pollution from the factory down the street goes unchallenged) could learn soething from these studies?

[Kyle Harris]

The Sierra Club is hardly legitimate. Wanna tell me why they lost non-profit status and pretty well any credibility from any level of government? Why is it that the Audobon Society can work with Golf Courses and the Sierra Club can't?

As for my altruistic view of Munis - sure I do, and yes, I do live in an area where they work. Tagging me as an idealistic student is way too far though. I can read budgets and balance sheets...

Of course, my area (Philadelphia) is at no loss for Daily Fee Courses, either. I've got about a dozen public courses within 15 miles of where I am sitting.  

Ken,

As for your friend who couldn't compete... are you telling me that there were no other market forces on the demand side of that equation not influencing his loss of business? In other words, a better range that was closer to a golf course? Economics states that the relationship of supply and demand dictate equilibrium price...

As for open spaces, parks and what not are considered dead land, and while they may look good at first, tell that to the government ten years from now when a developer comes knocking on the door with plans for houses called "The Odyssey" and "The Patriot" in nice multi-colored diagrams. It's far easier for anyone to fight for a golf course than a swing set with numbers and facts.

[Brad Klein]

At the Jersey Golfer event at Essex County CC, Chris Schiavone made an argument against munis on the basis of a myth regarding the free market - he's relying upon an Adam Smth paradigm that never exists in the real world. How convenient for him to forget the favorable zoning and tax situation that most privately-owned daily-fees are in. Or the fact that most of the hardship experienced by owners is due to overbuilding, not specifically to munis.  

Beside, munis are generally filling a market void at the low end of the market that daily-fees have created because of their historically aggressive pricing structure. Second, it's a myth, as Kelly Blake Moran points out (above) that munis sail through the regulatory process. County, state and federal agencies treat them like any other applicant, and in most towns (I know from New England, at least, on this one) the local town wetlands board is no more favorable to them either.

Schavione thinks that munis work with a series of advantages, but he fails to look the restraints of pricing that highly-politicized munis operate under. Ever attend a public session when they try to raise fees?

There are all sorts of different models by which munis operate. Some are Park & Rec facilities where revenues are raided for the public cofers. The best operated ones function within an enterprise zone whereby all net revenues are poured back into the golf course.

Schiavone likes to wield his free-market ideological brush, but it's way too loose and doesn't get close to the real internal dynamics of the daily-fee/muni golf market.

[Ken Fry]

Sean,

The primary muni. in this area was built prior to any of the other public courses.  Did the owners of later built public courses know what they were getting in to?  Of course.  As Brad stated, "Munis are filling a market void at the low end of the market daily-fees have created..."  

Logic would say you take your revenues minus your expenses and what you're left over with is hopefully on the plus side (at some facilities, the bigger the better).  What happens when that number is in the red??  Who pays the price when a course isn't operating profitably.  That's my knock.  Banks aren't looking well upon courses defaulting on loans.  What bank loan does a muni course begin with?  Who's been paying for years when the courses aren't profitable?

My challenge isn't who's in the business, but if business is conducted on a level field.  When it's not, it's wrong.

Kyle,

Supply and demand will dictate price, unless there exists an entity that can go below their operating revenue to incur losses and remain in business.  I'm NOT saying this is typical, but it happens in our neck of the woods.

I will echo what Brad said, try to raise the $300 season pass rate for a retirie and see what holy hell breaks loose!  So given the unique "market forces" at a muni course, is it then acceptable for them to not even pay for themselves?  If the local government is set up that way, so be it.  It seems wrong to me to allow this situation when there are so many more things (economic development, police and fire personnel, school system, etc.) to tend to.

[Doug Siebert]

Buck,

If you don't like my library example, there are plenty of other things that cities do that compete with private enterprise.  Some people want to get tax credits to pay for their kids' private school education rather than sending them to the "free" public schools their taxes pay for.  If they got that ability, I'd argue that I should have that portion of my taxes refunded since I have no children!

On the other hand, I would be so damn happy if my local government was one of those who had done their own community cable system because our city council totally screwed us 25 years ago when they brought cable in by granting a monopoly, so we pay 2x as much as a city 30 miles away who just coincidentally has two competing franchises the residents can choose from, and another 45 miles away that has a monopoly granted to the community owned cable system.  You could certainly argue that a city has no business running a cable system, and maybe you are right, but personally I don't think 25 years of everyone in town paying 2x as much as they otherwise would have is worth it for a city to avoid running the risk of being labelled socialist.  And hey, irony of ironies, in the late 90s we were one of only a few cities in the US with a mayor from the Socialist party and we still extended that damn cable monopoly!

Sometimes (well OK, often) taxes pay for stuff you don't need, or don't want.  If I'm paying for something that I don't want, I lose money as surely as if I was losing money competing with the government in business.  But you don't get to pick and choose, otherwise I want to opt out of paying for that moronic and pointless Iraq war, the next guy will want to opt out of the EPA, someone else will want to eliminate NASA and rely on Richard Branson's effort to bring us into space, and so on.

The government competing with privately owned golf courses is the tip of the iceberg.  The same city which I talked about the golf course here is getting $50 million in federal money to build an indoor rain forest.  Yes, in Iowa.  Why?  Well, because we have two powerful senators who can make it happen, and every other senator is getting their state lots of pork, so we feed at the trough like the rest of them.  But woe to those business owners who reside where they decided they wanted to put it.  They rezoned everything and are essentially using a combination of that and eminent domain to take over.  The land owners are getting a pretty fair deal from what I understand, but too bad for those who were just leasing.  You ask people what they think of extreme government powers like eminent domain and they hate it when the government takes land for its own use.  But they seem to have no problem profiting from it for those cases when the government takes land to sell back to developers for stuff like malls.  They'll use catch-phrases like "increasing the tax base" and "revitalizing the infrastructure".

So if any of you Americans are wondering why we have a half trillion deficit each year now, 1/100000th of a percent of that will be just a few miles where I'm sitting.  Hey, might be nice to visit on a cold grey day in winter, get some artificial sunlight and walk around in 85 degree and humid conditions so I can remember what summer is like!  As wasteful as that is compared to what I could think do with $50 million in free money to spend on the good of the community, I suppose it can't be any worse than the pork barrel projects going on nearby other GCAers.  For me, the worst thing was just realizing when I typed this that $50 million, more than I can imagine ever possibly having in my life, is only one one hundred thousandth of a percent of our federal deficit for this year!!

[Ken Fry]

Sean,

The what's to be done if a municipal course IS costing tax payers money because it consistently operates at a loss?

[A_Clay_Man]

The best operated ones function within an enterprise zone whereby all net revenues are poured back into the golf course.

Brad, Having now lived and golfed at two of the country's best municipal values, and witnessed how these enterprise funds have been executed, it should be clarified that abuses are still possible, in an enterprise fund set-up.

  Is building a 4 mil dollar new clubhouse really putting the money back into the course?

[Brad Klein]

Hey, Adam, abuses are rampant, and I don't mean to suggest that any one structure is pure. All I mean is that an enterprise fund is the best way to protect revenues, but unless you have dedicated people operating the structure, it's all wasted as the funds will sucked into the general town budget or the Parks Department. I have seen too many munis ruined by managers, whether elected or appointed, getting ambitious, greedy, or, in the case of a $4 million clubhouse, simply stupid. And nothing will help if, as in Tacoma right now, decision makers are working with fanciful notions bearing no relation to business reality.

[Matt_Ward]

Rob W:

The topic of muni golf was most certainly a discussion issue between the different panelists this past Saturday.

I don't agree with the take of Chris Schiavone. I do agree with what Eric Bergstol (Founder / President of Empire Golf) said when he opined that muni golf does have a place provided it doesn't leap into the upscale daily fee category in which he and other private sector players compete in rigorously. Clearly, there is a difference between what the two groups do and what advantages / disadvantages take place.

Eric's point in having to compete against muni's at the upscale level is not a level playing field and frankly the role of muni golf should be to provide an "opening" to the game of golf so that the cost to play is not an issue. The private developer, for the most part, could frankly care less about affordable golf -- they are in the game to make a buck and as a result cater to that market.

Eric is quite correct that public resources should be used to "expose" people to the game. Should those same folk desire to have additional benefits / amenities then the CCFAD model that Eric and others provide would be the ticket for them.

Muni golf does have a specific role and it's folks like Somerset County (NJ) and their proactive park commission that handle one particular slice of the market. Thank heavens for the folks in Somerset, Morris and Monmouth counties in New Jersey.

Brad Klein is correct -- overbuilding lies at the heart of the issue and came and much of that was centered upon the faulty reasoning of folks from the NGF (build one course per day for the next few years). Laying the blame at the foot of muni golf is really a diversion from what has taken shape.

 

[Buck Wolter]

Craig-
My problem is you can never prove that something is making a 'profit' within a government entity. I think it's very revealing that Sarbannes Oxley doesn't apply to government agencies.

Doug-
I think you make my point for me. What if the rainforest museum makes a profit and lures enough rubes into a family vacation in Iowa that the economic benefits outweigh the costs, does that make it less pork? One man's rainforest museum is another man's 18 hole golf complex with driving range, proshop and banquet room available for Bar Mitzvahs and Weddings.

Is there another business that competes with Government like Golf? I can't think of one off the top of my head.

Hopefully the Supreme Court will come down on the side of private property owners here soon and some of the advantages of a municipality will go away. I don't actually know if condemnation has been used for golf courses but it's being done in the St. Louis area right now to a family in the name of green space & sprawl reduction.

Buck

[Cliff Hamm]

Is there another business that competes with Government like Golf? I can't think of one off the top of my head.

 

Buck

There are many, many examples of where private enterprise chooses to compete with government or vice versa depending on your perspective.  Camping immediately comes to mind with state, national parks versus private campgrounds.  Beaches are sometimes public but often there are private beach clubs.  Marinas may be private or run by the local town.  Zoos of quality are most often public but we have all seen typically run down private facilities.  Even weddings may be held in public areas and often there are public facilities for receptions with albeit private catering.  These arae just a few examples that come to mind.  With the cost of golf escalating and private golf not always an option please do not pick on the 'poor' muni player and do keep in mind that government run golf was here well before today's upscale private golf owners.  Whether government has an advantage is up for debate, but I am for anything that makes golf more accessible and affordable.

Cliff

[Ken Fry]

Sean,

The next time I hear that my city government is going to war, a significant change is indeed required.

Ken

[Kyle Harris]

Thanks for that Ken,

As I understand it, there highest level of government even remotely involved in Golf Construction is the State government, and then only as a add on to another facility or park.

Of course, funny it wasn't brought up yet... but Sweden does have a nationalized golf program, in fact, I think you need a license to play on national courses.

How about that? An American Golf License...

[A_Clay_Man]

Matt Ward,

How does a place like Bethpage fit into your analysis?

And from this comment;

Eric's point in having to compete against muni's at the upscale level is not a level playing field and frankly the role of muni golf should be to provide an "opening" to the game of golf so that the cost to play is not an issue.

Is there a hint of a suggestion in there, that muni's shouldn't strive to be the best they can be?

Abuses like the one the city of La Quinta California are perpetuating, with their 197 million dollar multi phased project, should be scrutinized closely. Is it some sort of a trick to have these phased-in projects? Waiting to see if revenue will be generated, before committing alloted funds to the remainder of the project?

[Rob_Waldron]

Matt

I think we have all seen municipalities making moves from affordable low end courses into the mid to high end in an effort to generate revenue to offset rising costs for other non-revenue programs. I do not think owners have a problem with affordable low end courses. In fact they encourage them because the players who learn the game at municipal courses often become customers at higher priced daily fee courses and country clubs. The NGCOA has concerns nationwide with the prevelance of municipal upscale courses.

[A.G._Crockett]

Is there another business that competes with Government like Golf? I can't think of one off the top of my head.

 

Buck

There are many, many examples of where private enterprise chooses to compete with government or vice versa depending on your perspective.  Camping immediately comes to mind with state, national parks versus private campgrounds.  Beaches are sometimes public but often there are private beach clubs.  Marinas may be private or run by the local town.  Zoos of quality are most often public but we have all seen typically run down private facilities.  Even weddings may be held in public areas and often there are public facilities for receptions with albeit private catering.  These arae just a few examples that come to mind.  With the cost of golf escalating and private golf not always an option please do not pick on the 'poor' muni player and do keep in mind that government run golf was here well before today's upscale private golf owners.  Whether government has an advantage is up for debate, but I am for anything that makes golf more accessible and affordable.

Cliff

I would add education to Cliff's list; private schools are clearly in competition with the public schools.  (FYI, the quickest way for a public school principal or superintendent to lose their job is for operating at a loss.  I would dispute the idea that municipalities have the ability to operate any service at a loss perpetually.)

Security firms vs. police forces?
Sanitation firms vs. city sanitation services?

One key economic role of government in a market economy is to correct "market failures", and affordable, entry level golf surely strikes me as a decent case study.  

My experience has been that munis are competing with CCFAD's to the same extent that Timex is competing with Rolex.

[Craig Sweet]

"My problem is you can never prove that something is making a 'profit' within a government entity. I think it's very revealing that Sarbannes Oxley doesn't apply to government agencies."

Buck, in all my years in local government there was never any problem figuring out where the money came from, how much there was, and where it was going.  There is no Sarbannes-Oxley, but there is "running for re-election", and if I dare say so, the city council is a far more dilligent "board of directors" than most that serve in the business community.

[Craig Sweet]

I think local governments are only getting involved in developing  "higher end" courses because taxpayers are demanding them.

They are accessible, affordable and higher end. A lot of golfers wil join if the membership in somewhere south of $1000 bucks a year or the green fee is under $45. It's just my opinion but I think a lot of these private courses have made access and affordability such a big issue that a lot of golfers are walking away from them.

[Matt_Ward]

Adam:

The Bethpage facility has 90 holes of golf -- the Black was created to be part of a much larger golf complex than just one layout.

In addition, the fees at all of the Bethpage courses have until recently with the '02 Open been quite modest and downright affordable for even the most frugal minded of players.

Only after the '02 Open have the fees risen for the out-of-state players. The rest of the complex is quite affordable.
I can remember paying no more than $25 to play the Black no more than a 5-6 years ago. Even today -- the top rate is still less than $80 for the Black.

The issue on Long Island is that the great number of golf options skews to the private side. By time the CCFAD approach came to Long Island -- roughly the late 80's and early 90's -- much of the good land was already off limits and what was left was often too expensive to be developed (save for a very few exceptions) for golf -- particularly public golf.

Rob:

I don't see the evidence that a vast preponderance of muni's are opting for the mid to high level upscale golf that many keep mentioning -- would love to see your study to back your point up. I travel the country quite frequently and while I don't doubt there are muni's who do want to go in this direction I can easily point out a number of examples in which the host community is looking only to provide for its own residents a golf option that is quite affordable.

Eric Bergstol pointed out a role for muni golf and I agree with his take. I don't buy for a New York minute the belief Chris S shared at the event. If one were to take his thoughts to furthest limit there would be no role for any public golf course and we would be dependent upon the private sector providing such a golf option. Frankly, I don't buy that because those in the private daily fee side are solely interested in maximizing their profits which is their prerogative to do -- I don't see these folks angling for the golfer who can only ante up $25 or less to play 18 holes.

[Kyle Harris]

Matt, out of state for the Black was $96.00 as of last September, but that's still not bad.