The latest scheme is to seek bids for a private sector golf course operator, and a similar estimate using city workers, who are members of the Service Employees International Union. In our view, there is virtually no chance that the union-based bid will be lower than that of outside operators, who will be able to use non-union labor.
Documents provided to the City Council last week show that personnel costs at Shoreline Golf Links are more than twice as high as those at Palo Alto and Santa Clara. Sunnyvale spent about $400,000 less than Shoreline on employee costs, but managed to bring in nearly a quarter-million-dollar profit.
Once a stellar profit-maker, the Shoreline course burned through some $800,000 in reserves so far this fiscal year and is currently running a $74,000 deficit. The outlook for next fiscal year is worse, a deficit of $900,000 to $1.5 million.
Some say the Shoreline course is hampered by unfair cost allocations, such as over $400,000 for water and $378,000 for overhead, which pays a share of the salaries for city manager and city attorney. And while many golfers stay for lunch and drinks at Michael's at Shoreline, none of the restaurant's annual rent of $155,000 is credited to the golf course. But so far, the city has shown little interest in changing the formula for computing costs for the golf links.
Instead, after studying the issue, the city staff is recommending that the city find a golf course manager through a competitive bidding process. By hiring a private company, the city believes it can control employee costs in a five-year contract with the operator, which would hire its own employees. A private operator will have an incentive, in the form of a performance bonus, to spruce up and market the course to bring in more players, many of whom are not Mountain View residents.
The downside of outsourcing is the loss of up to 11 city employees, some of whom have served the city for many years. They might be able to hire on with a new operator, although it is unlikely that they would have union representation or earn the pay they receive now. It is unclear what will happen to them. But one thing is clear: a loss next fiscal year of up to $1.5 million is simply not acceptable.
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