Duluth looks to stem losses from golf courses
Duluth's two municipal golf courses continued to lose money last year, but Billy Casper Golf, which oversees the operations, laid out a plan Monday that it says could return them break-even status in the coming season. But the upshot would be a shortened period for play at the Lester Park Golf Course.
All told, Duluth's Enger and Lester Park golf courses finished the 2016 season $176,195 in the hole, not counting depreciation.
That's roughly a 4.6 percent improvement from the previous year, when the courses lost $184,659. But it's nowhere near what will be needed if the courses are going to being paying down a $2 million debt accrued to cover ongoing losses.
Frequent rains contributed to the courses' challenges last season, but even if weather patterns return to normal next year, the financial losses will likely continue to mount if they operate as they have in the past, predicted Gary Nelson, general manager for Billy Casper's Duluth operations. He forecasted the two courses would lose about a combined $103,000 in 2017 without action.
Nelson laid out a couple of changes that could put operations back in the black, however.
Billy Casper proposed to take what had been two separate positions directing sales and operations and combine them into a single job to achieve a savings of about $65,000 next year.
The firm also recommends the city offer an abbreviated golf season at Lester Park, running from May 1 to Oct. 1 — a move that is expected to save more than $81,000
"We would do this to consolidate the activity to one location in Enger Park during the slower months of the season — being April, October and sometimes November, if we're lucky. The reason why we'd do that is each day Lester Park and Enger Park both simultaneously stay open, we lose about $600 per day," Nelson said
A couple of other options were detailed at Monday's Duluth City Council committee-of-the-whole meeting, but they were not recommended by staff.
One of the ideas involved closing the Lake 9 holes at Lester Park, as many golfers find them too challenging. But Nelson noted the rigorous holes also attract certain golfers. Billy Casper projects that removing the nine holes could produce a little more than $21,000 in savings.
Nelson also discussed the possibility of closing Lester Park Golf Course altogether, while warning of a downside.
"You would lose a well-loved golf course with a long tradition and a strong community. This would obviously be our last resort option that we'd want to go to. But you can see the savings of almost $180,000 if Duluth had one 27-hole golf course at Enger Park."
Gary Anderson, who represents Duluth's easternmost neighborhoods, said he expects to receive an earful from constituents concerned about that proposal.
"There's a community there that needs to be involved in the conversation," he told Nelson, asking him to engage local golfers in discussing the options that are being considered.
Anderson encouraged Nelson to "work together with them to find the best solution to these big issues, so that we can then make the hard decision, if you will, about how to best move forward with the support of the community."
Nelson responded, saying: "We embrace that. We understand that the discussions around Lester Park have been going on for years. We are not in the business of closing golf courses or recommending that. We believe that if the golfers at Lester Park will allow us to make them feel welcome at Enger Park for just a few weeks of the year, that this is a solution that can save the city significant money."
David Montgomery, Duluth's chief administrative officer, pledged to keep local golfers in the loop.
"The question of Lester is out there. It's been out there for three years. We've talked about this. We consulted and engaged with the Lester Park and Enger golf communities significantly over these years, and we will continue to do so," he said.
Montgomery gave high marks to the Billy Casper recommendations.
"We are supportive of these actions to get to break-even in 2017; we think that's the first step we need to deal with. However, it's important to realize that this is a long-term significant financial issue here, and we're going to have to address it in significant long-term ways," he said.
"We still have the $2 million debt outstanding, and that has to ultimately be repaid at some point. It's critical that we get golf operations up to a level where we can start making meaningful reductions in that over what will likely be an extended period of time. We have no illusions about our ability to repay it in five to 10 years, but we ought to be on a path where we can chart that to be repaid in 20 or 25 years," Montgomery said.