Thursday, May 11, 2017 by Jo Clifton

Council ponders how to pay for golf

Most of Austin’s Parks and Recreation Department programs operate on money from the city’s General Fund, but at some point in the past City Council designated golf as an enterprise fund. City staff reported to Council at last week’s budget work session that the Golf Enterprise Fund would have “a significant negative ending fund balance” at the end of the current fiscal year. By “significant,” they were referring to a projected loss of more than $538,000.

Enterprise funds, such as Austin Energy and Austin Water, provide services to the public, but none of the money for those services comes from tax dollars. In fact, enterprise funds generally put money into the city’s General Fund.

Council Member Jimmy Flannigan, who represents District 6, said he found the golf numbers troubling.

“Of all the things that PARD does, this is the least important to me. And I represent a district which has a lot of private golf courses. They are also struggling,” he said. “Are we solving a problem that is not ours to solve? I feel very strange that we are in a place to have General Fund money going to golf enterprise. If we’re running it as an enterprise fund, that’s great, but … I’m very, very troubled by General Fund monies going to golf enterprise.”

However, other Council members did not say they agreed with Flannigan. Mayor Pro Tem Kathie Tovo said recreational services are typically not moneymaking, but they are still an important service that the city provides to its citizens.

Golf actually operated in the black from 2008 through 2012, but has run a deficit since Fiscal Year 2012-13, according to statistics presented by staff. The city’s General Fund has helped those courses pay their bills.

For 2016, revenues exceeded expenses at the Lions Municipal Golf Course and at Grey Rock Golf Club. Expenses exceeded revenues at Morris Williams, Jimmy Clay/Roy Kizer, and at Hancock.

Four of the six city courses were affected by flooding in 2013 and Jimmy Clay was also damaged by a fire, all of which led to unexpected expenses.

One reason staff gave for the current increased deficit was implementing Council’s policy decision to provide a living wage for all city employees. According to city staff calculations, the impact of that decision to the golf fund for the current year is $478,000. If that is correct, it accounts for all but $60,000 of the current deficit.

Grey Rock, which was acquired in 2014, is a special case. Its revenues for 2016 were $175,000 and expenditures only $100, according to city data. Because there is a management contract dating back to 2014, Grey Rock does not pay the city’s living wage.

Former Parks and Recreation director and current Interim Assistant City Manager Sara Hensley said that although the policy had cost the city a considerable amount of money it was very helpful when they began to hire lifeguards for the summer. That job currently has a starting salary of $13.50 an hour, according to the city’s website.

Tovo was particularly interested in hearing about how the city might charge higher greens fees for non-Austin residents. She noted that Austinites pay less to swim in city pools than non-city residents.

Kevin Gomillion, the manager of the city’s Golf Division, told Council only about 30 percent of golfers playing on city courses come from ZIP codes outside the city. He suggested that it might not be a good idea to charge higher fees for people who live in Central Texas because they have the option to play golf in nearby suburbs. An increased fee for local suburban residents, Gomillion said, might lead to fewer golfers on the city’s courses.

Hensley said putting money into renovations at the courses leads to better golfing and increased revenues. “Lions is a perfect example,” she said, noting that the city does not own the land but merely leases it from the University of Texas. The clubhouse is antiquated and the irrigation system needs to be replaced, she said, and the city has devoted a limited amount of money to it. According to a 2012 presentation to Council, “the Golf Enterprise Division will spend $3,283,200 on the remaining lease payments through 2019.”

As a result of its defects, Hensley said, many people choose not to play at Lions. Hensley compared that to the experience at Morris Williams, which was recently renovated and got a new clubhouse. “We immediately saw an increase in use and an increase in excitement,” she said.

Hensley also said golf is an important social and recreational outlet for young people who may not have other avenues outside what the city provides.

When the day was done, Hensley said she believed Council directed staff to look at increasing the cost of golf rounds, charge out-of-Austin residents more and see if they can find ways to make the program more sustainable.

“But I didn’t get the sense that they wanted us to do something drastic or say it has to be an enterprise” fund, she said.

Photo by Larry D. Moore [CC BY-SA 4.0], via Wikimedia Commons.

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Key Players & Topics In This Article

Austin City Council: The Austin City Council is the body with legislative purview over the City of Austin. It offers policy direction, while the office of the City Manager implements administrative actions based on those policies. Until 2012, the body contained seven members, including the city's Mayor, all elected at-large. In 2012, City of Austin residents voted to change that system and now 10 members of the Council are elected based on geographic districts. The Mayor continues to be elected at-large.

city budget: The city’s plan for expenditures based on income.

City of Austin Parks and Recreation Department: The city department responsible for the city's park system, rec centers, and associated infrastructure.

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