The bottom line — financially — when it comes to options for operating the Manteca Golf Course will require at least a $314,200 annual subsidy from the municipal general fund.
The dollar impact of four primary options the City Council could pursue following the death of contract pro Alan Thomas who ran the course for 40 years is outlined in a study conducted by Gene Krekorian Pro Forma Advisors.
The report goes before the council when they meet Tuesday at 7 p.m. at the Civic Center, 1001 W. Center St. The council is being asked by staff to provide direction on what way to go as the interim contract with Thomas’ widow Marjorie Thomas expires June 30.
The first outside financial analysis of the golf course account in over a decade comes as the council is preparing a budget for the new fiscal year starting July 1. It takes into account existing as well as future soft market conditions for golf play with declining play and flat rates anticipated.
It puts all costs on the table as well as adding a $100,000 a year capital improvement reserve set aside. It also shows the true costs of operating the course although many critics of the city contend those charges shouldn’t be slapped against the golf course since the functions involved are handled by existing staff in city administration, finance, and parks and recreation. They note such charges aren’t made to other recreational facilities. The big difference is the golf course is set up as an enterprise fund, much like water, sewer and solid waste. As an enterprise fund it is supposed to cover its own costs without tapping into the general fund.
The council is under pressure to find funding to retain six firefighters as federal grants for their pay will end Dec. 31. There are also growing community complaints about deteriorating roads and the city’s limited ability to keep up especially as they slashed the street division staff in half a decade ago in response to the Great Recession hitting.
The two issues standout against other pressures on general fund spending across the board to deliver city services.
The city currently taps the general fund for $155,000 to help subsidize senior and youth play. Based on current financial trends, the report concludes the annual golf course subsidy will need to more than double that regardless of the option the council takes. The existing subsidy per se is not broken out on the consultant’s tally sheet comparing the four options but is essentially collapsed into the city’s losses.
The net loss, according to the consultant, for the four options are as follows:
uLeasing the golf course to an outside firm would result in a net annual loss to the city of $314,200. That is after factoring in a direct course subsidy of $174,700 that is essentially on top of the $314,200 loss. It also includes $100,000 in annual costs for the city to manage and monitor the lease.
uGoing to a management agreement with an outside firm that would contract the golf pro services out and hire a private firm to maintain the course would result in a net loss to the city of $314,200. It would not, however, require a direct golf subsidy of $174,700. It also includes $100,000 for city lease management and monitoring.
uSwitching to a slightly different version of the management agreement with an outside firm hiring a golf pro and overseeing city maintenance would result in a net annual loss to the city of $367,000.
uKeeping the existing “hybrid” model with the city contracting for a golf pro and the city overseeing their own maintenance crews would result in a loss to the city of $331,500. It includes $215,000 for city management and monitoring costs.
uThe city running the entire operation including the golf pro duties would result in an overall loss to the city of $429,000. It includes $175,000 for city monitoring of the golf course.
All four options — as well as a slightly different version — includes setting aside $100,000 annually in a capital improvement reserve.
If you take out the city lease management/monitoring charge — that is essentially the cost recovery charge for other city expenses that the council suspended as an expense for the golf course enterprise fund over a decade ago — the losses for each option drops to the following: $214,200 for the facility lease, $214,200 for the management agreement with private maintenance, $252,000 for the management agreement with city maintenance, $116,500 for the current model, and $254,000 for city self-operation.
If you take out the existing $155,000 subsidy for golf play for seniors and teens the losses for each option drops to the following: $59,500 for the facility lease, $59,500 for the management agreement with private maintenance, $97,000 for the management agreement with city maintenance, a $38,500 net gain for the current model, and $99,000 for city self-operation.
And if you take out the $100,000 capital reserve set aside that is not happening now but is a fiscally responsible move as greens, fairways, and such eventually may need major work in addition to routine maintenance all options will not result in a bigger hit to the city’s budget compared to current costs with one exception. The facility lease includes a $174,700 operating subsidy so in reality there would be a $134,200 loss compared with how the course is being operated today.
To contact Dennis Wyatt, email email@example.com