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In what is sure to be an emotional meeting on Tuesday, the City Council is set to vote on outsourcing the operation of the city’s money-losing golf course.
City management is recommending that the city outsource Shoreline Golf Links operations to Texas-based Touchstone Golf in order to stop the course from losing as much as $6.3 million over the next five years, according to a city staff report. The move would mean the elimination of 11 good-paying city jobs, but city management believes that outsourcing could bring the city $237,000 in revenue next year and $2.5 million over the next five years with revenues increasing steadily, helping to fund core city services.
The other option is to keep the course city-run, with some changes to bring in a modest profit of $200,000 over the next two years, barely break even for three years after that and begin losing money again in six years if fiscal trends continue, the city reports.
Mayor Jac Siegel said it wasn’t worth it to only cut the city’s golf course costs “a little bit” and said it was not practical for the city to continue to subsidize golf.
“The only thing worse than being laid off yourself is to lay somebody off,” Siegel said. “But what are you going to do? That’s what we’re faced with. We have to stop the flow of loss of money. It hasn’t been anything we’ve done to mismanage the golf course, it’s the economic situation,” which has made golfing more of a luxury.
Siegel added that the city may eventually have to shut the course down and said he worried about having a five-year agreement with a contractor who might also lose money for the city.
In a previous meeting, council members deadlocked 3-3 on whether to outsource the course, with council member Ronit Bryant absent.
The union which represents the golf course workers, Service Employee International Union, has agreed to cuts in employee pay and benefits and would support the elimination of two pro shop employee positions and two greens-keepers for a total of $487,000 in savings.
But city staff say the course would still be deep in the red if other accounting changes are not made as well. Michaels at Shoreline, a restaurant at the course, could subsidize the course with $150,000 in revenue that normally goes to core city services in the city’s general fund. The city would also have to stop charging the course for administrative costs, which would pinch $275,000 from the general fund. The city would also stop charging about $431,000 a year for water, a cost which would be spread among the city’s water users, increasing water rates city-wide by 2 percent, according to a city staff report.
Eighty-five percent of the course’s employees may be able to fill other vacant positions in the city, a staff report says. Touchstone has also expressed an interest in hiring them, presumably with lower wages.
“Presumably the new operator won’t pay the same kind of benefits,” Siegel said. “Things are not pretty but that’s what’s going on.”
Tuesday’s City Council meeting is scheduled for 6 p.m. in City Hall at 500 Castro Street.
Whichever route the city council takes, I hope that future operator of the course will focus more on upkeep and quality of the fairways and green.
Currently, the course isn’t very well kept and frankly is not competitive with neighboring courses in quality/value. If the course was better maintained, more people would want to play at Shoreline instead of going to Palo Alto or San Jose.
Outsourcing it? Does that mean they’re sending it to India?
TRY LOWERING THE PRICE SO MORE PEOPLE CAN AFFORD IT. LOTS WOULD PLAY IF THE COST WAS LOWER
I agree with Richard. Way too expensive, even for Mtn View residents. Also would be nice if they could clean up some of the duck poop on the greens.
This article points out how many of the City’s administrative and water costs are being charged to the golf course. It sounds like in an outsourcing scenario these costs won’t go away, and will be charged to someone else (ie will the city lay off the administration now providing support to the course? Doubtful). Then, on the other side of the ledger, the City apportions Michaels revenues towards the general fund, and doesn’t count them towards the course. So the City tacks expenses onto the golf income statement and takes away revenue (granted some Michaels revenue is independent of the course, but with no course a good chunk of the revenue wouldn’t happen). That certainly can’t help the course look good (or accurate?) financially.
While this may all be advantageous in the shuffling of City funds, it doesn’t present a clear picture of the Golf course financials, which is essential for this decision. Perhaps it’s in the details of the analysis, but when the alternatives are analyzed, don’t forget to include the city expenses that don’t go away in the total costs of the outsourcing alternative. It would also be interesting to see what rate the City is burdening the course with for City administrative costs.
The bottom line is that it takes x amount to run a course. The grass needs to be mowed and watered, the course needs to be maintained, and people need to run the front desk and driving range. A new operator that specializes in course management probably can do a slightly more efficient job, but expecting big savings isn’t realistic, and hopefully won’t be clouded by the burdening being done with the current golf course financials. The real savings will be in employee benefits. So multiply the benefits cost by the number of workers…maybe subtract a gardener or two. That’s your savings. If the new operator has a good reputation and/or spends more money than the city does on marketing, then maybe revenue goes up. Maybe not.
Perhaps there is a connection between 11 ‘good-paying city jobs’ and losing bushels of money.
Just get rid of it and build more apartments or business buildings
History may repeat itself…
Originally, the golf course was outsourced. The company did a poor job. In order to end the contract, the city had to pay $2,000,000.
@Kman: They can’t put buildings there for a couple of reasons. It is a park and the county paid some money for it so they need to get county permission to do that, though they might be able to lobby for that. More important, it is on top of a sanitary landfill and you can’t put buildings there.
I’m with Finances and Tom: I doubt that outsourcing will save as much money as the potential contractor thinks and, if so, we may end up taking the golf course back or closing it.
Closing the golf course will bring a cost burden back to the city: the area has to be maintained, whether as a golf course or as open space. As open space, there is no income, not merely insufficient income as we have today with the golf course.
Well, I guess it doesn’t hurt to let Touchstone Golf have a go at it and see if they can improve it. But if they can’t, let’s close it down. Golfers complain about the course and the city is losing money on it. The land could be a park open to everyone, or made into a wildlife refuge.
Kudos to City Hall for stopping the losses.
Put the course out to bid as a lease. If no one can return cash to the city, allow it to revert to its wild state. It’s plain wrong to tax the public so that a small minority can play expensive games.
Thanks Gman, did not know that!
A park on a Sanitary landfill, that makes good sense. Not.
I would say lobby the county and offer free rent for a few years to a big company like Google to clean up the land fill and build there complex. I hear Apple is looking for some land.
Kman, building the park on sanitary landfill is exactly what made Shoreline Park possible in the first place.
A visionary Mountain View city council signed a contract with San Francisco to take their garbage for, as I understand it, a ten-year period. This garbage was used to build up the swampy area. Methane collectors were built into the area, with the concept of collecting the methane and using or selling it to provide funds to maintain the park. Then soil was brought in to cover the garbage.
I don’t have more specifics to offer, but the story of how Shoreline Park came into being would make a fine feature article for the Mountain View Voice.
@Steve…
careful there… I’m not much of a golfer, so I understand where you are coming from, but I also am not much for skate parks, not much for dog parks, sailing, the performing arts, etc., etc., etc…. there are lots of publicly subsidized activities and services that are both expensive and utilized by a small minority. I doubt you are proposing we get rid of everything, but your hobby or pastime may very well be someone else’s expensive, publicly subsidized extravagence.
Public golf dates from the Old Course at St. Andrews. The private “Country Club” dates from eastern US during the 1890’s. If the golf course was not a golf course, it is still over landfill and would need to be maintained like the rest of Shoreline Park, certainly not natural. The last operator made a mess, but the City’s idea of charging the course might need some work. Does the City charge rent and administration to the Center for Performing Arts? How about Rengstorff House? Many Mountain View residents choose to play Palo Alto and Sunnyvale since those courses do a better job with geese. Pro shop employees have historically relied on sales and lessons for significant income. This concept is more complicated when they are City employees. Why these new guys had to be from Texas, I don’t know. San Jose Muni, Santa Teresa, and Palo Alto all do well enough with local operators.
@SP Phil: You might be interested in the Voice’s 2008 article on the 25th anniversary of Shoreline Park, which includes its history as a landfill. You can find it here: http://www.mv-voice.com/story.php?story_id=4470