Council hikes greens fees to keep Louisville golf courses city-run — with more transparency - Courier Journal

In an effort to make Louisville golf courses self-sustainable and prevent the need for outside management, Louisville Metro Council has passed an ordinance that hikes greens fees and allows some courses to close during the winter months.

The move, supporters say, is a way to keep golf in Louisville as close to the same as possible, while limiting its drain on the city's general fund budget.

It also, importantly, comes as Mayor Greg Fischer's administration took steps toward exploring bids from companies that could manage the city's golf courses and, likely, alter the current business relationship with the golf pros.

Councilwoman Cindi Fowler, D-14th District, the lead sponsor, has said retaining pros at each course — not required in the request for proposals, or RFP, sent out by Fischer's team earlier this year — is critical to the future of municipal golf.

In a statement after the vote, Fischer said he hoped the Metro Council's action would not limit responses to the RFP process: "Our citizens deserve to know how other cities have found ways to more efficiently operate municipal courses."

Background: Metro Council takes stand to preserve city-run golf courses

The legislation, approved in an 22-1 vote, will:

Hike greens fees by $5 at Louisville's 10 city-owned golf courses, which Fowler estimates will raise at least $1 million.
Allow six of 10 golf courses close during the winter months to save money.
Let pros do dynamic pricing of greens fees, all of which go to the city's general fund.
Require that revenue generated through the golf courses be dedicated solely to golf course expenses, including deferred maintenance needs.
Ensure that golf pros have the right to submit proposals on individual courses, and that local businesses would get preferences in consideration of any bids.

Following reporting from The Courier Journal about city's current contracts with the golf pros, an amendment added Thursday night will require pros to disclose revenue, expenses and profits associated with the operation of their clubhouse and pro shop in quarterly reports.

Nearly all of the pro contracts expire on Dec. 31.

A separate amendment also requires any person or entity managing a golf course in 2019 who bids on a 2020 contract to provide a similar itemized breakdown to the quarterly reports, for Jan. 1 through Sept. 30 of this year.

"On the eve of all these contracts all coming due, I think that is an excellent opportunity for us to renegotiate those deals," said Councilman Mark Fox, D-13th District, who spoke in favor of being good stewards of the taxpayer dollar.

The city's arrangement with PGA professionals, or golf "pros," has them operate each of Louisville's 10 courses as individual businesses funded through cart, merchandise, concession and lesson revenue that never reaches the city's coffers.

Under the current system, which stretches back decades, the golf pros run the show at Louisville courses. They offer lessons, staff the clubhouse, manage the course and act as the face of city golf — all while overseeing budgets that, at successful courses, can total hundreds of thousands of dollars.

"We are leaders in the industry and we bring that leadership to the golf course," said longtime golf pro Kevin Greenwell, who now works at Seneca, the city's top-performing course. "We bring in rounds of golf."

Current contracts give pros more than 90% of course revenue to, in theory, put back into their operation, but the city hasn't tracked how it's spent.

That structure has persisted as play at city-owned courses has followed national trends and fallen, hurting the city's main source of golf revenue to put back into maintenance: greens fees set by Metro Council.

It's also continued amid a rising pension bill for the city that's meant larger personnel costs for city government employees, including the course maintenance workers who fall under the budget of Louisville Metro Parks.

The amendment added Thursday will give council members a better sense of the amount that is put back into golf course operations and the amount, if any, that they pocket.

An analysis conducted by The Courier Journal, published Wednesday, found that pros at well-played Seneca, Charlie Vettiner and Iroquois collected $799,283.50, $473,570.83 and $384,208.68, respectively, in fiscal year 2017-18.

In sum, the pros netted roughly $3 million, while Metro Parks collected roughly $220,000 from those sources, according to records obtained through open records requests.

Greenwell, Seneca's pro, said Tuesday that he and other pros would be open to adjusting the percentage of revenue they send to the city, should greens fees rise, to create a "balance."

"It's possible, I think, our percentage needs to be raised along with the greens fees being raised, is what I would say. We're paying 10%. All of us would be OK with it going up to 12 or 13% if it stays in the current system," he said. "If the customer pays more, I should have an increase in my percentage also, within reason."

Fowler also said there is a memo of understanding with the union representing golf workers showing they're willing to reduce AFSCME workers from 29 to 17. That, combined with reductions in non-union workers, is estimated to save $800,000, Fowler said.

Councilman Bill Hollander, D-9th District, a supporter of the RFP put out by the Fischer administration, had worried that passing the ordinance would short-circuit the process by limiting the number of respondents willing to put forth a bid. He ultimately voted against the ordinance.

Fischer spokeswoman Jean Porter echoed Hollander's concern last week, writing in a statement that Fowler's proposal "may limit responses to the RFP process before it can play out, which could leave us with an unfunded status quo that threatens golf sustainability altogether."

Fischer added Thursday that city golf courses have been collectively losing increasing amounts of money in the last three years, "which cuts into funding for other parks operations." They also have capital needs of about $20 million, he said.

"I appreciate the Council's passion on this issue but hope their vote tonight will not limit responses to the RFP process," Fischer said, adding that the vote results will be added to the information in the bid solicitation.

"Our goal remains the same — balance the budget and keep our city momentum going," he added.

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Darcy Costello: 502-582-4834; dcostello@courier-journal.com; Twitter: @dctello. Support strong local journalism by subscribing today: courier-journal.com/darcyc.

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2019-10-11 01:06:00Z
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